Part 5 - Debt MF - FD | Kirtan Shah CFP

If you are investing for the next 24 months, FD will give you 7% returns fixed. If you withdraw before the 2 years, there will be a 1% penalty. If you invest in Medium / Long Duration Debt Mutual Funds, you can make ~10% returns with full liquidity. When interest rates fall which is the expectations over the next 18-24 months, in Debt MF you not only make the 7% but you also make capital gains because the bonds in which the MFs have invested will increase in value when interest rates fall as they are still paying high interest rates hence the value goes up. You can look at funds like SBI Medium Duration and Nippon India Nivesh Lakhsya. This is not an advice but just for education. (Debt Mutual Fund, Fixed Deposit, FD, MF)