Bank FDs vs. Mutual Funds: Capital Safety and Tax-Efficient Returns

1. Bank FDs • Positive’s • Capital safety • Up to Rs.1 lac per account under Deposit Insurance and Credit Guarantee Corporation of India • Returns Guaranteed • Different maturity bucketsfor different investment horizons

2. Bank FDs • Nagative’s • Poor Liquidity • Normally, premature withdrawal attracts penal interest • Tax-inefficient • Returns hardly keep pace with inflation • For illustration purposes only. • Renewal required • Don’t renew, and you lose interest

3. Tax-efficient returns For illustrative purposes only. Please note that the actual returns may vary. Under the growth plan, long term capital gains tax @ 10% (without surcharge) has been considered assuming a one year plus horizon. Under the dividend plan, it is assumed that the entire gains are distributed.

6. All Observations: A) In the above Observation, it is clear that even FD is volatile. Ranging between 10.5% to 5.25% in last 13 years. B) Total 46 case under observation. C) 4 time Negative Performance by MF. D) 3 time Under Performance (Compare to FD) by MF . E) 12 time Moderate out performance (Up to Rs. 15,000) by MF. F) 11 time Extra ordinary out performance (Up to Rs. 1,00,000) by MF. G) 16 time Double Extra ordinary out performance (More than Rs. 1,00,000) by MF. H) Overall gain in MF compare to FD is Rs.33,94,804 I) Long term Capital gain Tax benefit also available in Equity MF Scheme.

7. Convenience • You need to open an accountonly once Keep adding more to the same account or withdraw whenever you want • No renewal worries Your money continues to earn return for you as long as you stay invested

8. Thank You