Mutual Funds vs. FD/RD: Which Savings Option is Best for You?

• FD and RD offer traditional safety with guaranteed, stable but limited returns (6-7% interest).
• Mutual Funds, especially equity-based, offer potential for significantly higher returns (12-15%) but come with higher risk.
• FD/RD incur penalties for premature withdrawal, while mutual funds offer better liquidity, though long-term investment is recommended for equity funds.
• FD/RD are suitable for risk-averse investors seeking stability, while mutual funds are better for long-term investors aiming to beat inflation.
• Experts recommend a hybrid strategy, combining FD/RD for safety and mutual funds for growth, to balance risk and return.

Why It Matters: Choose between FD/RD for safety or Mutual Funds for higher returns, or combine both for a balanced approach.