Fixed Deposits or Short term Bonds.
Depends on 3 factors.
Income of the investor.
Duration of the Investment.
Risk taking of the Investor.
Can be summarized as follows:-
| Parameter. | Fixed deposit | Short term bonds |
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| 1.Interest rate | 8 to 8.50 percent. | 4.50 to 5 percent. After tax. |
| But this is before tax. |
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| Suitable for:- | With comparitively higher income. | For those who do not fall . |
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| in higher tax slabs |
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| 2.Tme period. | For short time period too. | Atleast fixed for 8-12 months. |
| Implications. | But premature penalty is charged. | Exit load is charged |
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| which may eat up all returns. |
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| Risk Ability | Low risk | Risk is higher |
| Assured Returns | Returns depend on the |
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| Interest rate prevaling in |
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| the market.(Set by RBI in India). |
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