Investors seeking higher returns than that offered by bank fixed deposits, can invest in equity savings schemes of mutual funds, albeit with some risk. These schemes invest one-third of the amount in fixed income instruments, one-third in equity-related instruments and the rest in arbitrage. For tax treatment, it is treated as an equity fund. Experts say conservative investors who invest in bank fixed deposits should look at equity savings fund as it is tax-efficient and offer higher post-tax returns. It is ideal for investors with moderate risk appetites for medium- to long-term investment objectives.
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