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Investment

In the financial industry, there are two concepts that form the basis of most transactional activities. One is savings and the other is investments. There is a huge difference between the two concepts when it comes to execution.

Investment in terms of financial context, means any money that is spent today in the hope of financial benefits that may be reaped in a future time frame. Any investment is the act of buying or creating assets with an expectation that the same would yield interest earnings or dividend or capital appreciation or any other return that is profitable as compared to the money put in initially. Almost all investments are differentiated from other kinds of transactions based on the aim of the money spent. Money spent on making investments is primarily with the aim of obtaining some sort of return in a specific period of time.

A lot of times people confuse savings with investments. Savings and investment are different from each other in their approach of utilizing the money involved. While saving may be understood as a passive way of accumulating wealth, investment can be seen as a more aggressive way of securing returns. Mostly, under savings, customers avail a savings account and stash away cash in that account. This cash can be used as and when required by the account holder.

Mutual Funds

Mutual funds are basically investment vehicles that comprise the capital of different investors who share a mutual financial goal. A fund manager manages the pool of money that is collected from various investors and invests the money into a variety of investment options such as company stocks, bonds, and shares. Mutual funds in India are regulated by the Securities and Exchange Board of India (SEBI), and investing in mutual funds is considered to be the easiest way through which you can increase your wealth.

Types of Mutual Funds in India

Mutual funds in India are classified into different categories based on certain characteristics such as asset class, structure, investment objectives, and risk. Here, we will help you understand in detail the various categories and the kinds of funds under each category.

Based on Asset Class

  1. Equity Funds

Equity funds make investments mainly in stocks of companies. Equity funds are the most preferred investment options among the majority of investors as these offer high returns and quick growth.

  1. Debt Funds

Debt funds chiefly invest in low-risk fixed-income instruments such as government securities. Since these funds come with a fixed maturity date and interest rate these are ideal for investors with low risk appetite.

  1. Money Market Funds

Money market funds invest in easily accessible cash and cash equivalent securities and offer returns as regular dividends. These funds come with relatively lower risk and are ideal for short term investment.

  1. Hybrid or Balanced Funds

Balanced or hybrid funds invest a certain amount of their corpus into equity funds and the rest in debt funds. Though the risk involved with these funds is relatively high, the generated returns are equally high.

Fixed Deposit Rates

When it comes to investments, fixed deposits are a preferred option as it offers guaranteed returns. Here, we have compiled the FD interest rates offered by various banks that operate in the country.

Fixed Deposit Interest Rates by Top 10 Banks in India

Listed in the table below are the interest rates(p.a) offered by top banks for the duration of 7 days to 10 years.

Name of Bank

For General Citizens

For Senior Citizens

State Bank of India

5.00% to 6.80%

5.50% to 7.30%

ICICI Bank

4.00% to 7.10%

4.50% to 7.60%

HDFC Bank

3.50% to 7.30%

4.00% to 7.80%

Punjab National Bank

5.00% to 6.75%

5.50% to 7.25%

Canara Bank

5.00% to 6.50%

5.50% to 7.00%

Axis Bank

3.50% to 7.20%

3.50% to 7.85%

Kotak Mahindra Bank

3.50% to 6.90%

4.00% to 7.40%

Bank of Baroda

4.50% to 6.60%

5.00% to 7.10%

IDFC Bank

4.00% to 8.50%

4.50% to 9.00%

Bank of India

5.00% to 6.50%

5.50% to 7.00%

Note: The interest rates mentioned in the table are for deposits less than Rs.2 crore as of 31 August 2019