Could you please clarify below:
1.
Could you please suggest me good debt mutual funds that are alternative to bank fixed deposits? I am interested in investment horizon of less than or equal to an year & investment horizon of 1-2 years
2.
Generally people feel secured in investing more than couple of lakhs (e.g. 20 lakhs) in good bank fixed deposits like hdfc bank fixed deposits but investing large amounts in debt short term mutual funds is safe? Or secured?
3.
It is my understanding that, if a reputed bank (e.g. HDFC Bank, State Bank of India, etc.) defaults on your large bank fixed deposits (e.g. 20 lakhs) then even Government of INDIA or RBI does not guarantee more than a lakhs of your bank fixed deposits and so we are risk of loosing anything above couple of lakhs of bank defaulting... is my understanding correct? if correct large sums of bank fixed deposits carry the same risk of depositing large sums in short term mutual funds. correct?
Thanks for great website and service.
3 Answers
Hi,
1 - Kindly go through below articles ;
https://www.relakhs.com/debt-funds-types-benefits-risk-vs-return/
https://www.relakhs.com/best-debt-mutual-funds-india-top-debt-funds/
2 - Kindly note that returns are not guaranteed on Mutual funds (debt or equity). But these are more tax efficient than bank FDs. If one wants safe and guaranteed returns then bank FDs can be considered.
3 - Your understanding is correct. However, our banking system is a robust one and is a well regulated one. Even if a reputed bank fails or goes bankrupt, I am sure govt will not let it happen, such bank may be acquired by another bank or can be bailed out.
Kindly read :
https://www.relakhs.com/bank-deposits-aware-one-interesting-fact/
when I asked this "Generally people feel secured in investing more than couple of lakhs (e.g. 20 lakhs) in good bank fixed deposits like hdfc bank fixed deposits but investing large amounts in debt short term mutual funds is safe? Or secured?", then what I mean is w.r.t security of our money or at least the belief that we are secured with reputed/branded bank fixed deposits , is investing 20-30 lacs in debt mutual funds is same as investing in hdfc/icici bank fixed deposits ?
Thank you Sreekanth for all the prompt responses.
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