SIP | Image Resource: freepik.com
Gone are the days when every single individual chose fixed Deposits over anything else for their long term investment needs. Nowadays this scenario is fast changing as investors are moving towards other forms of investments like Kotak Mutual Funds SIPs. It is supposed to be a risk free investment alternative with steady returns because of this reputation other investment instruments which can provide a higher return in the same amount of investment is neglected.
Investing in Kotak Mutual Funds yields the same or more returns. Fixed Deposits yield a return of 7 percent whereas mutual funds have a return rate of about 8-10 percent which is a huge difference for people investing large sums of their savings. By this we can deduce that the chances of getting a higher return on Kotak Mutual Funds is more likely than in a fixed deposit.
Withdrawal
Both instruments make it easy to withdraw the investment at any given point of time but the process of withdrawal differs in both of these instruments. If the investor withdraws within one year of the investment he/she has to pay an exit load amount to the manager. Although one year from the investment there is no exit load. The investor can enjoy the returns after paying the applicable taxes. Whereas premature withdrawal from a fixed deposit brings in a lot of penalties for the investor. This becomes even worse when an individual tries to withdraw the investment after a couple of days from the investment as a lot of money is deducted in the name of penalties.
Risk
Kotak Mutual Funds Investors tend to believe that there are no risk associated with fixed deposits which is totally untrue. Like any other investment instrument fixed deposits too carry a certain amount risk.
These are some of the important aspects of consideration while choosing between Kotak Mutual Funds SIPs or fixed Deposits.
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