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Bank deposits vs other Investments

Mr. C.S. Sudheer | Updated On Saturday, February 21,2009, 08:18 PM

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Bank deposits vs other Investments



Fixed Deposits are considered to be the safest form of investment or savings that provides returns consistently at a fixed rate. The term fixed in Fixed Deposits denotes the period of maturity or tenure. An Investment means keeping aside money today, to get a higher return in the future.

Bank deposits

  • Bank deposits give an almost assured, fixed and uninterrupted returns
  • It is easy to choose a deposit scheme at a Bank as they are simple and can be understood by a layman
  • Bank deposits are one of the safest investments and risk of default is minimal
  • There are no rebates available under Income Tax for deposits in Banks, except under special schemes now floated by Banks for availing the income tax rebates.
  • Bank deposits gives comparatively lower rate of returns

Other investments

  • The returns from equities, mutual funds are not assured. The company deposits and debentures may stop servicing of interest any time due to losses.
  • The investments in equities and mutual funds is much more complicated and complex for a layman.
  • Investments in equities, company deposits, debentures, mutual funds etc. is more risky.
  • Deposits in schemes like NSC, PPF, Infrastructure allows rebates in Income Tax.
  • Company Deposits, debentures, equities can give higher returns, but have higher degree of risk.

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Article Author

Mr. C.S. Sudheer

Mr. C S Sudheer is the founder and CEO of – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of He aims to build a nation that is financially literate with investment savvy citizens.

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