Looking for the top 5 mutual funds that have delivered impressive returns in just the last six months? You’re in the right place! Investors who trusted these mutual funds are now enjoying returns far better than traditional Fixed Deposits (FDs). Whether you’re a beginner looking for smart options or a professional keeping tabs on the best-performing funds, this article breaks it all down in a clear, friendly, and expert-backed way.
Top 5 Mutual Funds vs Fixed Deposits
| Feature | Top Performing Mutual Funds (6 months) | Fixed Deposits (Average) |
|---|---|---|
| Average Returns | 5.5% – 17.14% | 6.5% – 7.5% |
| Investment Type | Debt & Credit Risk Funds | Bank FD Schemes |
| Risk Factor | Moderate | Low |
| Liquidity | High (Can withdraw anytime) | Locked-in period (Premature withdrawal penalty) |
| Taxation | Taxed as per income slab after indexation | Taxed as per income slab |
If you’re looking to make your money work harder, mutual funds are proving to be a lucrative alternative to Fixed Deposits. In the past six months, funds like DSP Credit Risk Fund and Aditya Birla Sun Life Credit Risk Fund have rewarded investors with returns as high as 17.14%, far surpassing FD returns. However, always align your investment decisions with your financial goals, risk appetite, and market conditions.
Why Are Mutual Funds Outperforming FDs in 2024-25?
Fixed Deposits (FDs) have long been a favorite among conservative investors. But in the past six months, a few debt-oriented mutual funds have significantly outperformed FDs, making them an attractive choice. Rising interest rates, improved credit quality, and well-managed portfolios have all contributed to these funds giving higher yields.
see also: Bank FD Big Losses: Know These 3 Major Losses Before Doing a Bank FD or Else
The Top 5 Mutual Funds That Beat FDs
1. DSP Credit Risk Fund
- Return (6 months): 17.14%
- Expense Ratio: 0.40%
- Type: Credit Risk Fund
- Why It Performed Well: Focused on high-yield debt papers, the fund capitalized on improving credit conditions and declining default risks.
Practical Tip: Ideal for investors with moderate risk appetite looking for superior short-term returns.
2. Aditya Birla Sun Life Credit Risk Fund
- Return (6 months): 10.47%
- Expense Ratio: 0.67%
- Type: Credit Risk Fund
- Key Reason for Performance: Managed effectively, reducing exposure to low-rated bonds and focusing on safe high-interest opportunities.
Pro Insight: Perfect for professionals and seasoned investors who understand credit risk dynamics.
3. Aditya Birla Sun Life Medium Term Fund
- Return (6 months): 7.76%
- Expense Ratio: 0.86%
- Type: Medium Duration Debt Fund
- Why It’s Unique: Balances risk and return by investing in a mix of corporate bonds and government securities.
Beginner-Friendly: A great stepping stone if you’re shifting from FDs to debt mutual funds.
4. Invesco India Credit Risk Fund
- Return (6 months): 5.86%
- Expense Ratio: 0.28%
- Type: Credit Risk Fund
- What Helped It: Strategic allocation in AA-rated instruments with reduced exposure to risky papers.
Advice: Suitable for those who want exposure to credit markets but prefer funds with lower expenses.
5. Bandhan US Treasury Bond 0-1 Year FoF
Post Office RD Scheme: 500 से 1000 रूपए निवेश करने पर कितना बनेगा फंड? देखें योजना की पूरी डिटेल
- Return (6 months): 5.50%
- Expense Ratio: 0.12%
- Fund Type: Fund of Funds, invests in US short-term treasury bonds
- Edge: Currency appreciation and global debt market trends contributed to returns.
Pro Tip: For diversification lovers keen on global exposure.
Fixed Deposits vs Mutual Funds: Detailed Comparison
| Criteria | Mutual Funds | Fixed Deposits |
|---|---|---|
| Returns | 5.5% – 17% (variable) | 6% – 7.5% (fixed) |
| Safety | Market-linked, moderate risk | High safety |
| Liquidity | High, can redeem anytime | Lower, penalties on early exit |
| Tenure | Flexible | 1 year to 10 years |
| Tax Efficiency | Tax benefits on long-term | No special tax benefits |
| Best For | Risk-tolerant investors | Conservative savers |
How to Invest in These Top Mutual Funds: Step-by-Step Guide
- Choose a Reliable Platform:
- Direct via AMC websites (e.g., DSP Mutual Fund)
- Third-party apps like Groww, Zerodha, Paytm Money
- Complete KYC Process:
- PAN Card, Aadhaar, and address proof required.
- Select Fund Type:
- Choose among Credit Risk, Debt, or Fund of Funds.
- Decide on SIP or Lump Sum Investment:
- SIP (Systematic Investment Plan) starts as low as Rs. 500.
- Monitor Regularly:
- Use tools like AMFI India for NAV tracking.
Why Professionals Prefer These Mutual Funds Over FDs
- Higher Returns: Direct result of market trends, credit rating improvements, and fund management expertise.
- Flexibility: You can liquidate investments anytime without heavy penalties.
- Diversification: Spreads risk across multiple bonds and securities.
- Tax Efficiency: Long-term investments in debt funds enjoy indexation benefits, reducing tax liability.
see also: SIP vs FD vs PPF: Which is Best Investment Option?
Top 5 Mutual Funds FAQs
1. Are these mutual funds safe for beginners?
Yes, but remember, unlike FDs, mutual funds are subject to market risks. Start with small investments and gradually increase exposure.
2. Can I lose money in credit risk funds?
There is a moderate risk, especially if invested in lower-rated bonds. However, well-managed funds like DSP and Aditya Birla mitigate such risks effectively.
3. What is the minimum amount to start investing?
Most mutual funds allow you to start with as little as Rs. 500 via SIP.
4. How are mutual fund returns taxed?
For debt funds, returns are taxed based on the investor’s income slab. Long-term gains (after 3 years) may benefit from indexation.
5. Where can I check official performance data?
You can visit AMFI India or SEBI’s Mutual Fund Section.
