November 10, 2025 · 9 mins read
Santosh Kumar
For many years now, Indians have treated Fixed Deposits (FDs) as the safest means of keeping their hard-earned money. They never fail to give returns, they are very simple to open and they do not have risks associated with them. But now, people are slowly changing their minds about FDs and the question that pops up is there an investment that is better than FD?
Although FDs are secure investments, the returns that are provided are sometimes less than that of inflation, thus the investors lose their purchasing power more and more as time goes by. So, if you are a person who wants to grow wealth smartly without taking too much risk, then you should take a look at the other options available in the market. Let’s find out what the alternatives are that could provide you with better returns and more flexibility than conventional FDs.
Before we go on to heaps of better options, it is essential to look at the reasons for investors to move away from FDs. The rates of interest in most of the banks run between 5% and 7% a year. At the same time, India's inflation rate is around 6% or more, which implies that the investors are practically getting no returns at all.
Moreover, FD interests are taxed fully according to the income slab, thus further diminishing your take-home profits. On top of that, early withdrawal charges and limited liquidity make FDs less attractive for today's investors who desire both growth and accessibility.
At this point, other financial products come into consideration, offering not only higher returns but also better liquidity and in some instances, tax advantages.
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If you want to find an investment better than FD, then below are some of the most well-known and trustworthy alternatives that you can consider.
Mutual funds are rated as one of the most popular investment choices. They combine the resources of a large number of clients and invest in shares or bonds or a mixture of both. Mutual funds, unlike Fixed Deposits (FDs), can give returns that are above inflation after a long time, but are still subject with a risk of the market.
The different types of mutual funds are — equity, debt, hybrid, and index funds, each one being at different levels of risk. For example, equity mutual funds can provide greater returns in the long run, whereas debt mutual funds not only offer security but also the benefit of better liquidity than FDs.
With SIPs (Systematic Investment Plans), you can start investing with a minimum of ₹500 per month, thus making it suitable for new investors.
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If safety is your main concern, the PPF is one of the best long-term investments with the least risk. It is supported by the Indian government and gives around 7%–8% tax-free interest currently.
The 15-year lock period encourages constant saving and compounding. PPF may be less liquid, but the Section 80C tax exemption and tax-free interest make it an attractive investment, similar to FD, for those who want safety and returns together.
NPS is another government-backed investment that helps you build a retirement corpus. You can invest each month, every quarter, or once a year, and the funds will be distributed over equity, corporate bonds, and government securities according to your liking.
It is a long-term investment during which the returns are expected to be in the range of 8% to 10%. Besides, NPS also provides tax deductions under Sections 80C and 80CCD, which makes it a dependable and disciplined investment like an FD if you are saving for retirement.
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Real estate is one of the precious, physical assets through which investors can unlock the value of their investment over time. It is usually accompanied by a high capital requirement; however, at the same time, it also provides the dual advantage of consistent rental income plus an increase in the property value.
Real estate is usually less liquid than other investment types, but it has always been a durable investment option as it often gives returns on par with or better than Fixed Deposit (FDs) over the long run. Investment success depends on several factors, including the market trends, the property location and your upkeep expenses.
Stocks or equities are one of the most rapid ways to gain wealth, but they also come along with higher risk. When investing in the stock exchange, you are indirectly investing in the company that you are buying shares from, thus, you get to enjoy the company’s increase in profits as well as dividends.
For those who want the growth potential of stocks without managing them directly, mutual funds or ETFs are great alternatives.
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If you pick the right stocks and keep them for a long time, you could earn a portfolio return of 10% to 15% per year, which is a lot higher than FDs. in this case, however, it is very important to do the proper market research, have a well-diversified portfolio, and remain unemotional. For people wanting the upside potential of stocks but not wanting to manage them, mutual funds or ETFs could be great options.
While looking into investments, spending control management is equally important. Here, the ZET Credit Card gets a competitive advantage. This advanced financial instrument is not a mere credit card; it becomes your companion in attaining better financial behaviour.
ZET Credit Card not only gives you cash back but also rewards points for every single transaction that you make, hence making it easy to turn your outlays into savings. Points can be earned on each transaction, such as paying bills, shopping online, and even booking a holiday, which will eventually result in a higher benefit for you.
So, if you want to organise your finances more intelligently, using a rewarding card such as ZET in combination with an investment better than an FD can assure your money the perfect mix of growth and convenience.
When evaluating these options, don't forget that not every investment is right for the individual. Your objectives, risk tolerance, and investment period should dictate your selection. Here’s how to make up your mind:
Short-term goals (1–3 years): Go for RDs, debt mutual funds, or short-term corporate bonds. Medium-term goals (3–7 years): Hybrid funds, gold ETFs, or PPF can provide a return at a low risk. Long-term goals (7+ years): Equity mutual funds, stocks, and NPS are perfect for creating wealth. It is also advisable to spread your investments. Rather than confining your money to one type of investment.
To begin with, Fixed Deposits have been a reliable source of income to Indian investors for many years. But if you want to get more from your money, it is time to attract other investment better than FD. Choosing an investment that is better than an FD does not imply taking unnecessary risks, but just the opposite, being prudent with your selection.
Investing in mutual funds, gold, NPS, or even real estate can make the process of letting your money work for you, being able to outrun inflation, and at the same time, keeping it relatively safe. A good example of a financial tool that can further improve your spending and saving journey is the ZET Credit Card, which can make it more rewarding than ever.
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Mutual funds can deliver greater, inflation-beating returns as a result of their longer investment horizon. Other than that, they provide the investor with the option of flexibility, diversification, and growth potential, which are usually not found in the case of FDs.
Definitely. PPF and NPS are among the government-backed options and provide safety along with higher returns. They are a great fit for people wanting long-term, stable growth.
Certainly! The combination of FDs for safety and mutual funds for higher returns provides the right mixture of security and wealth creation for you.
The ZET Credit Card gives cashback and rewards on every purchase made with it. The savings made can be for further investment, thus converting daily expenditures into a smart wealth-growing process.
PPF, Sovereign Gold Bonds, and government bonds are all regarded as the safest options. Although their returns may be low, they are not subject to risk, and they reward investors with steady, inflation-beating returns over time.
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