Why You Might Consider Switching From Mutual Funds to FD, NPS, or PPF
Investing your hard-earned money wisely is crucial for building long-term wealth and financial security. Mutual funds have become a popular choice for many investors seeking higher returns through equity exposure. However, mutual funds come with certain costs, risks, and complexities that may not always align with every investor’s goals, especially when expected returns fall below 10%. In such cases, safer and more predictable options like Fixed Deposits (FD), National Pension System (NPS), or Public Provident Fund (PPF) could be more suitable. Here’s why you might consider making the switch: 1. Costs and Charges in Mutual Funds Can Erode Returns Mutual funds charge an expense ratio (typically between 0.5% and 2.5%) every year regardless of fund performance. This fee covers fund management, research, and operational costs. Additionally, if you invest through a distributor or advisor, upfront commissions of 2-3% can further reduce your effective investment. These charges compound...