Investors swap FDs for MFs in a quest for better returns

A section of traditional Indian investors may have gradually started moving away from their preferred savings instrument as bank deposit rates plummet to historic lows, and are looking at avenues for higher returns despite increased risks. Experts said small savers who used to rely on bank fixed deposits for guaranteed ‘risk-free’ returns are now increasing their exposure to debt and equity mutual funds. The shift in preference was reflected in the numbers for May—while growth in bank deposit declined, inflows in mutual funds soared.

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