A PROJECT REPORT

ON
“A COMPARATIVE STUDY OF FIXED DEPOSITS AND MUTUAL FUNDS WITH
REFERENCE TO THE STATE BANK OF INDIA”

A REPORT SUBMITTED TO
RASHTRASANT TUKADOJI MAHARAJ NAGPUR UNIVERSITY.

IN FULFILLMENT OF THE
REQUIREMENT OF
MASTER OF BUSINESS ADMINISTRATION.

SPECIALIZATION IN:
FINANCE MANAGEMENT

ACADEMIC SESSION:
2022-2023

SUBMITTED BY:
LOKITA VINOD ROKDE

PROJECT GUIDE:
DR. ANANT DESHMUKH

DEPARTMENT OF BUSINESS MANAGEMENT,

RASHTRASANT TUKADOJI MAHARAJ NAGPUR UNIVERSITY,
NAGPUR.

1
 CERTIFICATE FROM THE DEPARTMENT/ COLLEGE/INSTITUTE:

RASHTRASANT TUKADOJI MAHARAJ

NAGPUR UNIVERSITY

www.nagpur university.org

DEPARTMENT OF BUSINESS MANAGEMENT

Law College Campus, Amravati Road, Nagpur
Established by Government of Central Provinces Education Department by Natification No. 513 dated the 1 st of August,1923
& Presently a State University governed by Maharashtra Public Universities Act, 2016 (Maharashtra Act No. VI of 2017)

CERTIFICATE

This is to certify that the investigation described in this report titled “A

COMPARATIVE STUDY OF FIXED DEPOSITS AND MUTUAL FUNDS WITH
REFERENCE TO THE STATE BANK OF INDIA” has been carried out by Mr./Ms.
LOKITA VINOD ROKDE of MBA Semester IV as a part of Project Dissertation, in partial
fulfilment of the requirement for the degree of Master of Business Administration of R.T.M.
Nagpur University, Nagpur.
This work is the own work of the candidate, complete in all respects and is of
sufficiently high standard to warrant its submission to the said degree. The assistance and
resources used for this work are duly acknowledged.

DR. ANANT DESHMUKH DR. ANANT DESHMUKH

Name and Sign of Internal Head of Department
Guide

Place: Nagpur
Date:

2
 CERTIFICATE

This is to Certify that “LOKITA VINOD ROKDE” is a Bonafide Student of the

Master of Business Administration (MBA) course specialization in “FINANCE
MANAGEMENT”. For Academic session “2022-2023”, of the RTMNU, Department of
Business Management, Nagpur.

The Candidate has worked under the supervision of DR. ANANT DESHMUKH and
has satisfactorily finished her project work in this academic session. The project submitted by
her is her own work and is complete so as to warrant its presentation for examination.

His project work titled “A COMPARATIVE STUDY OF FIXED DEPOSITS

AND MUTUAL FUNDS WITH REFERENCE TO THE STATE BANK OF INDIA”
which is in partial fulfillment of the requirement for the above course, is being forwarded to
Rashtrasant Tukadoji Maharaj Nagpur University for examination.

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 DECALARATION

I “LOKITA VINOD ROKDE” hereby declare that with the exception of suggestions
and guidance received from my Supervisor, DR. ANANT DESHMUKH, this project work
titled “A COMPARATIVE STUDY OF FIXED DEPOSITS AND MUTUAL FUNDS
WITH REFERENCE TO THE STATE BANK OF INDIA” is my own hard work. This
report as one, which is substantially the same as this, has not been submitted by me for any
other examination of this University or any other University.

LOKITA VINOD ROKDE

M.B.A. IVTH SEMESTER

PLACE: NAGPUR
DATE:

4
 ACKNOWLEDGEMENT

The compilation of the dissertation in the present form would not have been possible
but for the valuable guidance, assistance, encouragement and contribution of various people at
different stages of time.

I am grateful to my guide, DR. ANANT DESHMUKH who helped me to organize

thoughts, work and study so as to compile this project report. It was due to his constant
guidance and support that I was able to study the topic in a detailed and analytical manner.

I would also like to thank, DR. ANANT DESHMUKH (H.O.D) of, RTMNU,
Department of Business Management, Nagpur, for giving me the opportunity to present this
report.

LOKITA VINOD ROKDE

M.B.A. IVTH SEMESTER

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 INDEX

Sr. No. Content Page No.

1. Acknowledgement 5

Chapter I: Introduction, Objective, Limitations and Scope of the

2. 7-35
study

3. Chapter II: Literature Review 36-37

4. Chapter III: Research Methodology 38-39

5. Chapter IV: Data Analysis & Interpretation 40-54

6. Chapter V: Findings and Suggestions 55

7. Chapter VI: Conclusion and Recommendation 56

8. Bibliography and References 57

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 CHAPTER I: INTRODUCTION

EXECUTIVE SUMMARY

A growing India offers opportunity across the various investments, a substantial part of
financial wealth. Therefore, investment plays an important role in growth of these economies.
Also, there is rapid growth in income of peoples in India due to some factors because of this
investment is increased day by day in various investment options. As income range rapidly
increasing there is need to increase awareness among the people related with various
investment option and different schemes.
The project is an attempt to study or awareness among the people related with some
investment option and also the preference of people while implementing the same. It provides
thorough knowledge of different aspects related with the behaviour of people for mutual fund
as compare to bank fixed deposit. The report is divided in four parts. The first part is dealing
with information related with advantage and disadvantage Bank fixed deposit. Second is
concept of advantage and disadvantage mutual fund. Third is concept of research methodology.
Fourth deals with interpretation of data collected.
Most of metro cities people like to put the money in market related schemes instead of
dumping it in the bank lockers, so it is quite obvious that they want to invest their money in
profitable venture. But still people prefer to go for traditional schemes as well for safety and
security purpose.
Now a day’s people become more sensible while choosing any type of investment. It is
more important to have good knowledge and understanding related with such scheme which
will help to choose better and safety investment tools.

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 INVESTMENT

An investment is a monetary asset purchased with the idea that the asset will provide
income in the future or will later be sold at a higher price for a profit. Investments are important
in light of the fact that in today's time, simply acquiring cash isn't sufficient. The money that is
earned through hard work may not be adequate to lead a comfortable lifestyle or to fulfil dreams
and life goals. To do that investment is necessary.
The developing countries in the world, like India faces the big task of finding sufficient
capital to utilize in their development efforts. Most of countries find it difficult to get out of the
vicious circle of poverty that is prevailing of low income, low savings, low investment, low
employment etc. With high capital output ratio, that is observed India needs very high rates of
investment that would take and make leap forward in her efforts continues of attaining high
levels of growth.
The major feature that is seen in an investment is safety of principal amount, liquidity,
income and its stability, appreciation and lastly easy transferability. A large and different
variety of investment avenues are available such as shares, banks, companies, gold and silver,
real estate, life insurance, postal savings etc. All the investors invest who wish to invest their
savings money decide their investment avenue on the basis of their risk-taking capacity and
their attitude.
TYPES OF INVESTMENTS
MUTUAL FUNDS:
Mutual funds have been in the market for around the past few decades but they have
gained popularity only in the past few years. These are investment vehicles that pool the money
of many investors and invest it in a way to earn optimum returns. Different types of mutual
funds invest in different types of securities. Equity mutual funds invest primarily in stocks and
equity-related instruments, while the debt mutual funds invest in bonds and papers. There are
also hybrid mutual funds that invest in equity as well as debt. Mutual funds are flexible
investments, in which you can begin and stop investing as per your convenience. Apart from
tax-saving mutual funds, you can redeem investments from mutual funds any time.
FIXED DEPOSITS:
Fixed deposits are investments that are for a specific, pre-defined time period. They
offer complete capital protection as well as guaranteed returns. They are ideal for conservative
investors who want to stay away from risks. Fixed deposits are offered by bank and for different
time periods. Fixed deposit interest rates change as per economic conditions and are decided

8
by the banks themselves. Fixed deposits are typically locked-in investments, but investors are
often allowed to avail loans or overdraft facilities against them. There is also a tax-saving
variant of fixed deposit, which comes with a lock-in of 5 years.
STOCKS:
Stocks, also known as company shares, are probably the most famous investment in
India. When you buy a company's stock, you buy ownership in that company that allows you
to participate in the company's growth. Stocks are offered by companies that are publicly listed
on stock exchanges and can be bought by any investor.
RECURRING DEPOSITS:
A recurring deposit is another fixed tenure investment that allows investors to put in a
specific amount every month for a pre-defined period of time. Recurring Deposits are offered
by banks and post offices. The interest rates are defined by the institution offering it. An
investment in this avenue allows the investor to invest a small amount every month to build a
corpus over a defined time period. It offers capital protection as well as guaranteed returns.
PUBLIC PROVIDENT FUND:
The Public Provident Fund (PPF) is a long-term tax-saving investment instrument that
comes with a lock-in period of 15 years. Investments made in PPF can be used to cam a tax
break. The PPF rate is decided by the Government of India every quarter. The corpus
withdrawn at the end of the 15-year period is completely tax-free in the hands of the investor.
PPF also allows loans and partial withdrawals after certain conditions have been met.
EMPLOYEE PROVIDENT FUND:
The Employee Provident Fund (EPF) is another retirement-oriented investment that
earns a tax break under Section 80C. EPF deductions are typically a part of an employee's
monthly salary and the same amount is matched by the employer as well. Upon maturity, the
withdrawn corpus from EPF is also entirely tax-free. EPF rates are also decided by the
Government of India every quarter.
NATIONAL PENSION SYSTEM:
The National Pension System (NPS) is a relatively new tax-saving investment option
Investors in the NPS stay locked-in till retirement and can earn higher returns than PPF or EPF
since the NPS offers plan options that invest in equities as well. The maturity corpus from the
NPS is not entirely tax-free and a part of it has to be used to purchase an annuity that will give
the investor a regular pension.

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 FIXED DEPOSIT

WHAT ARE FIXED DEPOSITS?

A fixed deposits is a financial instrument offered by banks, post office, and other
NBFCs (Non-Banking Financial Company) which offers the investors a higher rate of interest
compared to regular savings or a salary account. Banks use the deposit money as capital for
other business operations. One such example is issuing loans at a higher interest rate than the
rate they pay to fixed deposit account holders. To invest in a fixed deposit, you need to have
that kind of money (lump sum amount) already available. Typical investors in fixed deposits
are the ones who would have already accumulated surplus cash over a period of time. For this
reason, fixed deposits are a popular choice of investments for retired individuals and senior
citizens. Another category of fixed deposit investors are the ones who would have huge sum
coming in from a sale of property or inheritance.
Key Highlights
• The principal amount deposited in fixed deposits remains the same. It does not increase
in value or grow in any other form.
• The interest rate offered by the banks can change if the bank decides to make any
alterations to the interest rate.
• With fixed deposits, you know exactly what your fixed deposit return is. It is a very
predictable financial product.
HOW DOES A FIXED DEPOSITS WORK?
A fixed deposit is a type of an account opened with a bank, where a bank agrees to pay
a fixed rate of interest for a particular period of time. For example, let us assume that you
invested a sum of Rs. 10,00,000 for 5 years, with a bank that offers an interest rate of 6% per
annum. You would be receiving Rs. 60,000 as interest payment each year for a 5-year period.
Based on your financial needs, you can choose to have this interest amount deposited into your
account on a monthly basis or once every quarter or once a year.
ADVANTAGES OF FIXED DEPOSITS:
Here are some advantages of investing in a fixed deposit:
• Guaranteed returns:
FDs provide a guaranteed return on the investment, regardless of market
fluctuations. The interest rate on FDs is fixed for the entire deposit term.
• Risk-free:
FDs are considered risk-free because they are not subject to market risks. The

10
 principal amount invested in an FD is safe, and the interest earned is guaranteed.
• Higher interest rates:
Compared to savings accounts, FDs typically offer higher interest rates, making
them an appealing investment option for those seeking higher returns on their
investment.
• Flexible tenure options:
FDs have flexible tenure options, ranging from a few months to several years.
This enables you to select the term that best meets your investment objectives.
• Tax advantages:
Under Section 80C of the Income Tax Act, tax-saving FDs are eligible for
deductions up to a maximum of Rs. 1.5 lakh. Senior citizens also receive a tax break on
the interest they earn on FDs.
• Liquidity:
FDs provide the option of premature withdrawal, which means that the
depositor can withdraw the money before the maturity period if necessary. However, it
may also result in penalty charges and a reduction in the rate of interest
DISADVANTAGES OF BANK FIXED DEPOSIT:
• Capital Appreciation:
Capital appreciation does not apply to bank fixed deposits. Only the principle
invested is returned back at the time of maturity.
• Tax Treatment:
Bank fixed deposits are not tax efficient. The interest is taxed. Also, there is no
benefit from making the investment. There are the 5-year bank deposits (tax saving)
that give benefit undersection 80C of the Income Tax Act. But the benefits such as
partial withdrawal or closure, and loan facility are not available. The deposit rates are
also lower compared to the normal fixed deposits. This effectively negates the tax
saved.
• Risk:
Perhaps the main reason for investment in bank deposits is safety of the
principal. The capital (only up to Rs1,00,000 though) has the highest safety compared
to any other investment as it is guaranteed by the Deposit Insurance & Credit Guarantee
Scheme of India. All banks operating in India are covered under this scheme.

11
 IN SHORT: The risk faced when investing in bank deposits is the interest rate risk.
This is associated with the lost opportunity to invest in an instrument that has a higher
return. Getting out of a fixed deposit can be costly (up to 1 per cent of the principal),
when we exit prematurely. So, we may have to forgo potential earnings when the
interest rate has risen only by about 1 per cent. The highest risk faced with fixed
deposits is the effect of inflation. The real return after adjusting for inflation is very
less or sometimes negative for fixed deposits of banks. This is a big burden, particularly
for retired people, who have invested their retirement proceeds to get regular income.
Their income may be regular and steady but the money's worth keeps going down
during the tenure of the fixed deposit. The bank deposit primarily serves us to preserve
capital. Banks now-a-days have added a lot of additional benefits to the traditionally
benign service. Retired people could make the best use of this avenue for securing a
fixed and steady income. The caution is not to use the fixed deposit as a long-term
investment avenue. The reason is that the real return is very less when adjusted for
inflation.
WHO SHOULD INVEST IN A FIXED DEPOSIT?
Individuals who may be interested in investing in FDs include:
• Risk-Averse Investors:
Fixed deposits are considered as low-risk investment options as they provide a
guaranteed return on investment. Investors who do not want to take any risk can invest
in FDs.
• Senior Citizens:
Banks often offer higher interest rates on FDs to senior citizens. As a result,
senior citizens looking for a safe investment option with higher returns can consider
FDs.
• Individuals With Short-Term Goals:
FDs offer various tenure options, ranging from a few months to several years.
Hence, individuals with short-term financial objectives can invest in FDs to earn a fixed
rate of return for a shorter period.
• Taxpayers:
Under Section 80C of the Income Tax Act, tax-saving FDs are eligible for
deductions up to Rs.1.5 lakh. So, those looking to save income tax can invest in such
FDs.

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 MUTUAL FUND
WHAT IS A MUTUAL FUND?
A mutual fund is a popular financial product that pools money from multiple investors
and invests that money in the equities market. A mutual fund uses the said financial resources
to purchase stocks and shares of multiple companies trading on the stock market.
Investing in mutual funds, doesn’t necessarily require any surplus cash and it doesn’t
have to be a lump sum investment (unless that is what you want to do). You can invest a small
percentage of your monthly income in the form of SIP investments. When your income
increases over a period of time, you can also increase the percentage of your SIPs. For this
reason, mutual funds are an ideal form of investment option for salaried professionals and
individuals with some form of monthly income.
Key Highlights
• The principal amount invested in mutual funds has the potential to increase in value. If
you stay invested in a mutual fund for a long period of time, your money has the
potential to earn better returns as your mutual fund investments are linked to the capital
market.
• The longer the tenure of your investment, better the scope of higher returns.
• Unlike fixed deposits, mutual fund returns are not predictable and they are subject to
different kinds of market risks. You can roughly estimate how much you can earn but
you may not know exactly how much with certainty.
HOW DOES A MUTUAL FUND WORK?
When you invest in a mutual fund, you purchase the mutual fund units (also known as
unit shares) to the extent of your investment. There are two possible ways in which you can
invest in mutual funds; you can either invest a lump sum amount and see how your investment
fares over time or invest in the form of a systematic investment plan (SIP).
SIP refers to investing a predetermined amount on a periodic basis. Each SIP enables
you to purchase additional units of the mutual fund. The value of your units held in a mutual
fund is determined by the fund’s Net Asset Value (NAV)
An integral part of understanding how mutual funds work is to learn how you earn from
mutual fund investments. If you opt for dividend payments, a mutual fund will pay out its
annual earnings as dividend payments. If you opt for reinvestment of your annual earnings back
into the mutual fund, you will have the benefit of capital gain. Capital gain refers to the increase

13
in the value of your asset, it essentially means that your asset is worth more than what you paid
for it.
TYPES OF MUTUAL FUNDS:
Most mutual funds fall into one of four main categories – money market funds, bond
funds, stock funds, and target date funds. Each type has different features, risks, and rewards.
Money Market Fund:
Money market funds have relatively low risks. By law, they can invest only in certain
high-quality, short-term investments issued by U.S. corporations, and federal, state and local
governments.
Bond Fund:
Bond funds have higher risks than money market funds because they typically aim to
produce higher returns. Because there are many different types of bonds, the risks and rewards
of bond funds can vary dramatically.
Stock Fund:
Stock funds invest in corporate stocks. Not all stock funds are the same. Some examples
are:
• Growth funds focus on stocks that may not pay a regular dividend but have potential
for above-average financial gains.
• Income funds invest in stocks that pay regular dividends.
• Index funds track a particular market index such as the Standard & Poor’s 500 Index.
• Sector funds specialize in a particular industry segment.
Target Date Fund:
Target date funds hold a mix of stocks, bonds, and other investments. Over time, the
mix gradually shifts according to the fund’s strategy. Target date funds, sometimes known as
lifecycle funds, are designed for individuals with particular retirement dates in mind.
WHO SHOULD INVEST IN MUTUAL FUNDS?
• Higher return seekers:
If you want to generate higher returns than bank deposits, mutual funds are the
right option for you. However, you will need to keep an adequate horizon and be
prepared to tolerate some volatility.
• Diversification seekers:
Because mutual funds invest in a wide range of stocks, bonds, and other
securities, they are a convenient way to diversify your portfolio. So, for anyone who

14
 wants a diversified portfolio, mutual funds can be a good option.
• Long-term investors:
Mutual funds are an excellent choice for investors with a long-term investment horizon.
That’s because over the long term, they can provide much better returns than bank
deposits. Plus, their volatility also gets smoothed out.
• Taxpayers:
Investments up to Rs 1.5 lakh in a financial year in a tax-saving mutual fund, also called
an equity-linked savings scheme (ELSS), are exempt from tax. So, with ELSS, you can
build wealth and save taxes as well.
GROWTH OF MUTUAL FUNDS IN INDIA
In theb19th century, Europe saw the beginning of the global mutual fund sector. The
first mutual fund firm, known as the “foreign and colonial investment trust,” was founded in
1868 by Robert Fleming, who pledged to invest and oversee the investors of “Unit Trust of
India (UTI)” in 1963, the history of mutual funds in India officially began. Mutual Fund
development in India has been gradual, as seen below:
• First Phase:
UTI Development and Formation (1964 to 1987) Phase I saw the creation and
establishment of Unit Trust of India as a result of parliament adopting an Act. The
Reserve Bank of India was responsible for incorporating UTI. After its formation, it
was the sole organization that sold mutual fund units and accepted investments. The
Unit Scheme, introduced by UTI in 1964, was its first program.
UTI later established a number of schemes in the 1970s and 1980s in response
to the demands of Indian investors. The first Indian Offshore Fund was formed in 1986,
whereas UTI introduced the first ULIP (Unit Linked Insurance Plan) in 1971. The
expansion of UTI expanded greatly in this era, from the date of creation until the year
1987.
• Second Phase:
Establishing public Sector Funds in Phase 2 (1987 to 1992) The foundation of
public sector funds, which permitted other public sectors organizations like banks and
NBFCs to launch mutual fund houses, took place in 1987.
As a consequence, the economy began to open up, and the State Bank of India
became the first bank to launch a mutual fund firm in 1987. Several other organizations,
including can bank, Life Insurance Corporation of India, Indian Bank, Bank of India,

15
 General Insurance Corporation of India, and Punjab National Bank, created their own
mutual fund firms after
SBI, following in its footsteps. As investors in India began to spend a significant
portion of their income in mutual funds, the asset under management for this sector
surged during this time from Rs. 6700 crores to a staggering Rs. 47004 crores.
• Third Phase:
Introducing Funds form the Private Sector (1992 to 1997) After the successful
launch of public sector funds, the mutual fund business expanded and saw the
development of private sector funds starting in 1993, allowing Indian investors a wide
range of mutual fund options from both the public and private sectors. On the other
side, it made Indian mutual fund businesses face more competition.
• Fourth Phase:
Development and implementation of SEBI rules (1997 to 1999) It was crucial
to establish a body that developed thorough rules and regulations for this business and
develop a competent organization to oversee the functioning of this sector as the mutual
fund sector experienced and attained higher heights. As a result, SEBI Regulation was
established in 1996. Standardization was established by SEBI, which also established
identical guidelines for all funds. During this era, SEBI and AMFI introduced a mutual
fund investor education programme.
• Fifth Phase:
Development of a Significant and Reliable Industry (1999 to 2004) During this
period the whole industry was integrated with a common set of norms and regulations.
Investors found it simpler to invest in different mutual fund firms thanks to the
consistent and Standardized operations and rules, which led to a growth in asset under
management from Rs. 68000 cores in the previous phase to over Rs. 1.50 lakh crores
during this phase.
• Six Phase:
Growth and Combination (2004 onwards) Since the day it was founded, the
mutual fund sectors have seen tremendous expansion and globalization. Since 2004,
there have been several mergers, demergers, and acquisitions of businesses and
financial products. Examples include the takeover of Allianz Mutual Fund by Birla Sun
Life and PNB Mutual Fund by principal. Thus, this business has been adjusting to and

16
 integrating new players, managing mergers and acquisitions, and maintaining its
upward trajectory since the year 2004.
• Organization of A Mutual Fund:
There are many entities involved and the diagram below illustrates the
organizational set up of a Mutual Fund

Mutual Fund diversify their risk by holding a portfolio of instead of only one asset.
This is because by holding all your money in just one asset, the entire fortunes of your
portfolio depend on this one asset. By creating a portfolio go a variety of asset, this risk is
substantially reduced. Mutual Fund investments are not totally risk free. In fact, investing
in Mutual Funds contains the same risk as investing in the markets, the only difference
being that due to professional management of funds the controllable risks are substantially
reduced. A very important risk involved in Mutual Fund investments is the market risk.
However, the company specific risk are largely eliminated due to professional fund
management.
MUTUAL FUNDS CAN BE CLASSIFIED AS FOLLOWS:
1. BASED ON THEIR STRUCTURE:
A. Open Ended Schemes: Open-ended schemes do not have a fixed maturity period.
Investors can buy or sell units at NAV- related prices from and to the mutual fund
on any business day.
The advantages of open-ended schemes are:
• Any time exit option
• Any time enter option
B. Close Ended Schemes: Close-ended schemes have fixed maturity periods.
Investors can buy into these funds during the period when these funds are open in
the initial issue.

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2. BASED ON THEIR INVESTMENT OBJECTIVES:
A. EQUITY FUNDS:
These funds invest in equities and equity related instruments. It can be
further classified as:
• Index Funds:
In this case a key stock market index, like BSE Sensex or Nifty is tracked.
Their portfolio mirrors the benchmark index both in terms of composition and
individual stock weight ages.
• Equity diversified Funds:
100% of the capital is invested in equities spreading across different sectors
and stocks.
• Dividend yield Fund:
It is similar to the equity diversified fund except that they invest in
companies offering high dividend yields.
• Thematic funds:
Invest 100% of the assets in sectors which are related to some of them.
• Sector Funds:
Invest 100% of the capital in a specific sector. e. g – A banking sector fund
will invest in banking stocks.
• ELSS:
Equity Linked Saving Scheme provides tax benefit to the investors.
B. BALANCED FUND:
Their investment portfolio includes both debt and equity. Following are
balanced funds classes.
• Debt-oriented fund:
Investment below 65% in equities.
• Equity-oriented funds:
Invest at least 65% in equities, remaining in debt.
C. DEBT FUND:
They invest only in debt instruments: they invest exclusively in fixed-
income instruments like bonds, debentures, Government of India securities; and
money market instruments such as certificates of deposit (CD), commercial paper

18
 (CP) and call money. They are classified as follow.
• Liquid Funds:
These funds invest 100% in money market instruments, a large portion
being investment in call money market.
• Gilt Funds ST:
They invest 100% in of their portfolio in government securities of and T-
bills.
• Floating fund:
They generate income through arbitrage opportunities due to mispricing
between cash market and derivatives market. Funds are allocated to equities,
derivatives and money markets. Higher proportion (around 75%) is put in money
market, in the absence of arbitrage opportunities.
• Gilt Funds LT:
They invest 100% of their portfolio in long-term government securities.
• Income Funds LT:
Typically, such funds invest a major portion of the portfolio in long-term
debt papers.
• MIPs:
Monthly Income plans have an exposure of 70%-90% to debt and an
exposure of 10%- 30% to equities.
• FMPs:
Fixed monthly plans invest in debt papers whose maturity is in line with
that of the fund.

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ADVANTAGES OF MUTUAL FUNDS:

There are multiple benefits of mutual funds, some of which are as follows:

• RETURNS:
The returns from mutual funds are market-linked. If the market does well and the fund
manager’s bets work, they can offer higher returns than bank FDs. However, if the
markets fall or the fund manager’s bets don’t work, they can also give negative returns.
• BEATING INFLATION:
If your objective is to get higher returns than the rate of inflation, mutual funds are a
better option than bank deposits. Among mutual funds, equity funds and certain types
hybrid funds have the track record of providing inflation-beating returns.
• DIVERSIFICATION:
Mutual funds invest in a diversified portfolio of stocks, bonds, or other securities, which
helps investors reduce the risk.
• PROFESSIONALLY MANAGED:
Mutual funds are managed by professional fund managers who have the expertise and
resources to analyse investments and make sound decisions. Investors can thus benefit
from the expertise of fund managers.
• LIQUIDITY:
Mutual funds are generally easy to buy and sell. They are a flexible investment option
that can be easily adjusted to meet an investor’s changing needs.
• FLEXIBILITY:
You can invest in mutual funds in a lump sum or through a systematic investment plan
(SIP) for any duration. There is no maximum limit of investment.

DISADVANTAGES OF MUTUAL FUNDS:

There are risks involved in buying mutual funds. These investment vehicles can
experience market fluctuations and sometimes provide returns below the overall market. Also,
the advantages gained from mutual funds are not free: many of them carry loads, annual
expense fees and penalties for early withdrawal.
• RISKS AND COSTS:

20
 Changing market conditions can create fluctuations in the value of a mutual fund
investment. Also, there are fees and expenses associated with investing in mutual funds
that do not usually occur when purchasing individual securities directly.
• NO GUARANTEES:
As Mutual funds invest in debt as well equities, there are no sure returns. Returns
depend on the market conditions.
• NO CONTROL:
Investor does not have control on investment; all the decisions are taken by the fund
manager. Investor can just join or leave the show.
• TAX INEFFICIENCY:
Investors do not have a choice when it comes to capital gain pay-outs in mutual funds.
Due to the turnover, redemptions, gains and losses in security holdings throughout the
year, investors typically receive distributions from the fund that are an uncontrollable
tax event.

21
 MUTUAL FUND VS FIXED DEPOSIT

Fixed Deposits (FD) have been the go-to investment for ages now. But in recent times,
mutual funds (MF) have become very popular due to their potential to generate higher growth
than FDs. Note the key differences between mutual funds and fixed deposits before investing.

Both FDs and Mutual Funds are popular investment options in India. However, they
differ significantly. Fixed Deposits are interest-earning investment options. On the other hand,
Mutual Funds earn returns by investing in a diversified investment portfolio. The fund invests
across stocks, debt instruments, and other assets. Mutual Funds are managed by fund managers.
The associated risk, liquidity, returns, and investment duration differ for both FD and MF.

Whenever the topic of mutual funds vs fixed deposits arises, fixed deposits end up
walking away with the favourable vote of confidence. For the longest time, fixed deposits were
the only kind of investments that were regarded as safe and dependable.
If you are someone who grew up in India, we can easily assume that you are no stranger to the
concept of fixed deposits. Any financial advice pouring in from senior family members
probably included fixed deposits as a mandatory investment. As the financial markets became
more sophisticated with time, the investment choices continued to grow exponentially. Today
there are countless financial products that cater to various financial needs of the different types
of investors. One such investment option is mutual funds.

For some reason, mutual funds and fixed deposits are constantly pitted against each
other. When people constantly ask which is better, mutual funds or fixed deposits, it isn’t
necessarily a fair comparison because these two financial products differ in one major aspect.
One of the biggest differences between mutual funds and fixed deposits is that, a mutual fund
provides return on the money invested and fixed deposits offers interest payments on the money
deposited.

22
MUTUAL FUND VS FIXED DEPOSIT:

Particulars Mutual Fund Fixed Deposit

Returns Market Linked Guaranteed

Risk High Risk No/Low-Risk

Monthly (SIP) or
Investment Lumpsum
Lumpsum
Charges for fund
Expenses management – Expense No expenses
Ratio

Lock in Period No Yes

Liquidity High Medium

Premature Allowed, with or without

Attracts penalty
Withdrawal exit load
Depends on the type of
As per income tax slab
Taxation MF and investment
rate.
holding period

Investors with good Investors seeking stable

Who can Invest
understanding of risk and guaranteed returns.

Asset Management Banks and Financial

Offered By
Company Institutions

Regulated By SEBI RBI

Impact of Interest Depends on kind of Unaffected, the interest

Rate Movements Mutual Fund rate is pre-determined

23
WHICH IS A BETTER INVESTMENT?

FDs have been the go-to option for Indian investors for many decades. Thus, many
investors don’t even think twice before investing in them. However, mutual funds can be a
better alternative. Not only do they have better return-generating capabilities, their taxation is
also more favourable. You don’t have to pay tax on mutual funds while your returns are
accumulating. You pay tax only when you redeem or sell your mutual fund units at a profit.
That’s not so with FDs. FDs are taxed even when the interest is being accumulated. Also, when
it comes to beating inflation, mutual funds do a pretty good job.

What discourages investors from investing in mutual funds is their inherent volatility.
Understand that volatility is a part and parcel of any market-linked investment, such as mutual
funds. Investors who learn to tolerate volatility are also rewarded with higher returns. Also,
within the mutual fund space also, not all funds are equally volatile. The risk–return profile of
mutual funds varies across the entire spectrum.

Traditionally, fixed deposits have always been popular because the investors consider
fixed deposits safe and risk-free. But as mutual funds started gaining popularity, and investors
started seeing better returns, mutual funds are beginning to give tough competition to fixed
deposits.

But, if you are evaluating your options and deciding between an investment in mutual
funds versus fixed deposits specifically for you, the answer completely depends on your
income, your monthly expenses, and your financial goals. Before you decide where and how
you would like to go about investing, you need to have a clear idea about these aspects.

KEY FINANCIAL PARAMETERS:

Returns:
• Equity Mutual fund returns completely depend on the performance of the stock market.
If the stock market continues to perform well, mutual funds offer returns accordingly.
Fixed income based mutual funds tend to be more like fixed deposits in terms of their
return profile. On average, a long-term mutual fund return has been around 12% looking
at periods of over 5-6 years and a mid and short-term mutual fund return (debt funds)
has been in the range of 6%-7%.
Check best mutual funds as per investment duration:
o Best Short-term Funds

24
 o Long-term mutual fund
o Best High Return Mutual Funds
o Best Fixed Maturity Plans
o Best ELSS Funds
• Fixed deposit returns are predetermined. Fixed deposit returns are guaranteed payments
throughout the tenure of your investment. The average rate of return on fixed deposits
has been in the range of 5% to 7%. Fixed deposit return depends on the bank you choose
to open your fixed deposit account with.
Check fixed deposit returns based on different tenure:
o Best FD Rates for 1 year
o Best FD Rates for 3 years
o Best FD Rates for 5 years
o Highest FD rate
o FD Interest rate for senior citizen
o Tax Saver FD
Risk:
• There is a reason why the phrase, “mutual fund investments are subject to market risks”
is constantly floating in the market. That is because equity mutual fund risk is linked to
market risk. Mutual fund risk also depends on the type of fund one chooses to invest in.
• Fixed deposit risk is relatively low. The depositor will continue to receive the fixed
interest payment. This is because fixed deposits are not affected by market
performances. However, a bank can still go bust and your FDs and interest is insured
only up to an amount of Rs 5 Lakh.
Growth:
• As highlighted earlier, equity mutual fund growth is linked to market growth and
depends on how the mutual fund performs over a period of time. Your principal
investment continues to grow if the market is on an upward trend.
• With fixed deposits, the principal amount deposited remains the same throughout the
investment tenure.
Withdrawal:
• Mutual fund withdrawals are pretty straightforward. If you have invested in an open-
ended fund, you can withdraw your investment at any time. With some mutual funds,

25
 you may have to stay invested for a minimum of one year. In some cases, you may have
to pay an exit load fee of 1%.
• Fixed deposits withdrawals on the other hand incur a penalty fee. Premature
withdrawals attract penalty.
Taxation:
• Mutual funds taxation is slightly complex to understand. Almost all mutual funds are
subject to short-term and long-term capital gains. Short-term capital gains tax (STCG)
are taxable at a flat 15%. Whereas long-term capital gains tax (LTCG) are taxable at
10% of the earnings above 1 lakh in case of equity. In the case of debt mutual funds,
LTCG are taxable at 20% after indexation. If you want to learn more about how mutual
funds are taxed.
• Fixed deposits taxation is in accordance with the income tax slab of the depositor. Fixed
deposits are subject to 10% TDS on interest earned over Rs. 5,000 in one financial year.

SAFETY OF FIXED DEPOSIT VERSUS MUTUAL FUNDS:

When FD vs mutual fund is compared, FDs are thought to be the safest investment
because of assured interest and principal on maturity. Though FDs are thought to be risk-free
investments, investors should know that the liquidity and safety of FD depends on the financial
solvency of the bank/ financial institutions. Banks are regulated by RBI, which tries to ensure
prudential lending norms so that depositor’s money is safe. However, several incidents of
violations of RBI norms have been seen in the recent past leaving depositors in the lurch. Such
incidents can cause suspension of withdrawal, limits imposed on how much you can withdraw
and even not being able to withdraw your money indefinitely depending on the situation. Such
unpleasant incidents notwithstanding, FDs are by and large very safe and give you assured
returns.

While comparing mutual fund vs fixed deposit, mutual funds diversify risks by
investing in a portfolio of stocks or bonds. However, mutual funds are subject to market risks
and there is no assurance of returns unlike FDs. Different mutual funds like equity funds and
debt mutual funds have different risk profiles. Equity as an asset class is much more volatile
than debt funds but has the potential of high returns over a long investment horizon compared
to debt funds. Equity funds are suitable for long term investment goals while debt funds are
suitable for short to medium term goals. Therefore, investors should always invest according
to their financial goals and risk appetite. Moderately high to high-risk appetite profile investors
26
can select equity funds while those who can take only moderate to low risk can invest in debt
funds.

BENEFITS OF MUTUAL FUNDS VS FIXED DEPOSIT:

Mutual Fund

• Your investment is professionally managed by a fund manager so you don’t have to

monitor the market yourself.
• Offers better returns (based on whether you choose debt funds or equity based mutual
funds) than fixed deposits.
• You can start investing with small amount.
• Offers risk mitigation through diversification.
• Offers better taxation compared to fixed deposits.
• Explore: Benefits of Mutual funds

Fixed Deposit

• Comes with very low risk.

• Provides a guaranteed rate of return.
• Convenience of monthly regular payments.
• Secured investment for senior citizen.

27
 STATE BANK OF INDIA

INTRODUCTION OF STATE BANK OF INDIA:

State Bank of India (SBI) is an Indian multinational public sector bank and financial
services statutory body headquartered in Mumbai, Maharashtra. SBI is the 49th largest bank in
the world by total assets and ranked 221st in the Fortune Global 500 list of the world's biggest
corporations of 2020, being the only Indian bank on the list. It is a public sector bank and the
largest bank in India with a 23% market share by assets and a 25% share of the total loan and
deposits market. It is also the fifth largest employer in India with nearly 250,000 employees.
On 14 September 2022, State Bank of India became the third lender (after SBI Bank and ICICI
Bank) and seventh Indian company to cross the ₹ 5-trillion market capitalisation on the Indian
stock exchanges for the first time.

The bank descends from the Bank of Calcutta, founded in 1806 via the Imperial Bank
of India, making it the oldest commercial bank in the Indian subcontinent. The Bank of
Madras merged into the other two presidency banks in British India, the Bank of Calcutta and
the Bank of Bombay, to form the Imperial Bank of India, which in turn became the State Bank
of India in 1955.] Overall the bank has been formed from the merger and acquisition of more
than twenty banks over the course of its 200 year history. The Government of India took
control of the Imperial Bank of India in 1955, with Reserve Bank of India (India's central bank)
taking a 60% stake, renaming it State Bank of India.

ABOUT STATE BANK OF INDIA FD:

SBI is an Indian Multinational, Public Sector Banking and Financial services statutory
body headquartered in Mumbai. It has about 1/4th market share. In addition to banking
services, SBI has diversified its business across SBI General Insurance, SBI Life Insurance,
SBI Mutual Fund, SBI Card, etc. As of March 31st 2022, SBI bank has 22,266 outlets across
India and 65,000 ATMs/ Cash Withdrawal Machines. SBI Bank Deposits stood at INR
40,51,534 crore as of March 2022. SBI Bank’s Fixed Deposits have a AAA (Stable) Credit
Rating.

SBI offers multiple fixed deposits accounts for various tenures with different FD
interest rates to its investors. The interest rate on SBI FDs is higher in their savings account.
One can invest in SBI FDs through both online and offline modes with just a minimum
investment of INR 1,000.

28
 FD Rate 3% - 7.1%
FD Rate for Seniors 3.5% - 7.6%
Minimum Deposit ₹ 1000
Maximum Deposit ₹ 2 Crores
Lock-in -
FD Tenure -
Loan against FD -
CRISIL Rating AAA (Stable)

STATE BANK OF INDIA FD INTEREST RATES 2023:

Note: All interest rates shown above are as on 4th May 2023.
Tenure Normal Citizen Senior Citizen
FD Rate FD Rate
7 days - 1 month 15 days 3% 3.5%
1 month 16 days - 5 months 26 days 4.5% 5%
5 months 27 days - 6 months 27 days 5.25% 5.75%
6 months 28 days - 11 months 29 days 5.75% 6.25%
11 months 30 days - 1 year 1 month 3 days 6.8% 7.3%
1 year 1 month 4 days - 1 year 1 month 4 days 7.1% 7.6%
1 year 1 month 5 days - 1 year 11 months 29 days 6.8% 7.3%
1 year 11 months 30 days - 2 years 11 months 29 days 7% 7.5%
2 years 11 months 30 days - 4 years 11 months 28 days 6.5% 7%
4 years 11 months 29 days - 9 years 11 months 28 days 6.5% 7.5%
STATE BANK OF INDIA FD RETURNS BASED ON INVESTMENT AMOUNT:
Investment Amount For 3 years with interest of 6.5% For 5 years with interest of 6.5%
₹ 50,000 ₹ 60,734 ₹ 69,141
₹ 1 lakh ₹ 1,21,467 ₹ 1,38,282
₹ 2 lakh ₹ 2,42,934 ₹ 2,76,563
₹ 5 lakh ₹ 6,07,336 ₹ 6,91,409
₹ 10 lakh ₹ 12,14,672 ₹ 13,82,817

SBI BANK FIXED DEPOSIT SCHEMES:

29
Following are the types of SBI Bank fixed deposit schemes:

• SBI Regular FD Account

• SBI Amrit Kalash Deposit
• SBI Sarvottam’ (Non-Callable) Term Deposit Account
• SBI Annuity Deposit Account
• SBI MOD Account
• SBI Tax Savings Scheme
• SBI Special Term Deposit – Reinvestment Plan
• Motor Accident Claims Annuity (Term) Deposit Account (MACAD)
• Floating Rate Bulk Term Deposit (FRBTD)

KEY FEATURES OF STATE BANK OF INDIA FIXED DEPOSIT SCHEMES:

• Premature withdrawal:
All SBI bank FDs can be withdrawn prematurely except for tax saving FDs. SBI
charges a 0.5%-1% penalty on the interest for premature withdrawals. However, their
penalty is subject to change as per SBI terms and conditions.
• Nomination facility:
SBI FD investors can nominate beneficiaries for their FDs.
• Auto-renewal:
Investors can opt for auto-renewal of their SBI FDs.
• Safety:
The Deposit Insurance Scheme of RBI covers all SBI bank deposits. The
scheme covers all SBI bank deposits up to INR 5,00,000.
• Additional payments:
Investors cannot deposit an additional amount in an SBI FD once it has
commenced. However, they can open a fresh SBI FD with the new amount.

HOW IS SBI FD INTEREST CALCULATED?

Interest on SBI FD is calculated using both simple and compound interest formulas.
The simple interest formula is SI = P x R x T/ 100, where P is the principal amount, R
is the interest rate, and T is the tenure of the FD.

30
 The compound interest formula is A = P (1+r/n) ^ (n * t), where A is the maturity
amount, P is the principal amount, r is the interest, n is the number of compounding periods,
and t is the tenure of the investment.

SBI MUTUAL FUND:

With an AUM of Rs 715,648 crores, SBI Mutual Fund offers 70 schemes across
different categories including 24 equity, 29 debt, and 5 hybrid mutual funds. Know the SBI
MF scheme details, historical returns, compare and invest in Best SBI Mutual Funds. Invest in
mutual fund schemes that suit your investment objectives, risk level, and fund options.

Name SBI Funds Management Ltd

AUM ₹ 715,648 Crores
Founded 30 June 1987
Incorporation Date 7 February 1992
Sponsor State Bank of India
CIO Mr. Navneet Munot
MD & CEO Mrs. Anura Rao
Contact Number 022-61793000
Email Id -
Website www.sbimf.com
SBI Mutual Fund Trustee
Trustee
Company Private Limited
9th Floor-Crescenzo, C-38
& 39-G Block, Bandra-Kurla
Office Address
Complex,Bandra (East)
400051

31
SOME OF THE BEST SBI MUTUAL FUND SCHEMES TO INVEST IN 2023:

Fund name AUM NAV 3Y Returns

SBI Overnight Fund (G) ₹20590.92 Cr ₹3649.46 4%
SBI Large & Midcap Fund (G) ₹9827.47 Cr ₹416.04 30%
SBI Consumption Opportunities Fund (G) ₹1194.60 Cr ₹221.54 33.6%
SBI Bluechip Fund (G) ₹34042.09 Cr ₹67.28 25.2%
SBI Liquid Fund (G) ₹69315.65 Cr ₹3538.96 4.3%
SBI Credit Risk Fund (G) ₹2823.90 Cr ₹39.01 6.9%
SBI Magnum Ultra Short Duration Fund (G) ₹11813.02 Cr ₹5160.58 4.6%
SBI Gold Fund (G) ₹1374.88 Cr ₹18.25 7.6%
SBI Magnum Global Fund (G) ₹5350.89 Cr ₹304.21 22.6%
SBI Equity Savings fund (G) ₹2232.88 Cr ₹18.48 13.2%
SBI Magnum Medium Duration Fund (G) ₹7221.56 Cr ₹43.87 6%
SBI Magnum Midcap Fund (G) ₹8733.51 Cr ₹160.23 37.9%
SBI Small Cap Fund (G) ₹15590.43 Cr ₹118.19 36.7%
SBI Focused Equity Fund (G) ₹26573.19 Cr ₹239.94 21.7%
SBI Dynamic Bond fund (G) ₹2845.71 Cr ₹30.75 4.6%
SBI Infrastructure Fund (G) ₹953.00 Cr ₹29.91 32.4%
SBI Magnum Low Duration Fund (G) ₹7772.47 Cr ₹3022.61 4.5%
SBI Magnum Constant Maturity Fund (G) ₹1461.15 Cr ₹54.39 4.2%
SBI Flexicap Fund (G) ₹15692.52 Cr ₹80.48 24.3%
SBI Equity Hybrid Fund (G) ₹54563.90 Cr ₹211.77 18.2%

32
 OBJECTIVES

The study will give an overview about mutual funds and bank fixed deposit. And also,
will give brief comparison between mutual fund and bank fixed deposit. It will help investors
to take effective investment decision.

• To study the various scheme of mutual fund investment as well as bank fixed deposit.
• To Study, which option is better to generate income and grow over a certain period of
time.
• To study the pros and consequences of the mutual fund and bank fixed deposit
investment.
• To identify the beneficial option for the investors among the mutual funds and fixed
deposits.
• To compare average returns of mutual funds and fixed deposits.

33
 LIMITATIONS

• The study is limited to selected investment avenues.

• Due to shortage or less availability of time it may be possible that all the related and
concerned aspects may not be covered in this project.
• The study is based just on secondary data available from monthly fact sheets,
websites.

34
 SCOPE OF THE STUDY

• The Indian mutual fund sector has seen significant growth in recent years, with more
and more investors turning to this investment option to grow their wealth.
• The Indian mutual fund sector is witnessing an increase in digital adoption, growth in
SIPs, focus on ESG funds, and rise of ETFs. These trends are shaping the mutual fund
industry in India and are expected to continue in the future.

35
 CHAPTER II: LITERATURE REVIEW

A literature review is a piece of academic writing demonstrating knowledge and

understanding of the academic literature on a specific topic placed in context. A literature
review also includes a critical evaluation of the material; this is why it is called a literature
review rather than a literature report.

Mutual Funds vs FD: SBI MF expert explains which investment tool is better for
child education planning
Written By: ZeeBiz WebTeam
Edited By: Harish Dugh
Updated: Wed, Sep 16, 2020
11:28 am
New Delhi, ZeeBiz WebDesk
Mutual Funds vs FD: When it comes to investment post-marriage, child investment plan is
the most common tool that comes to one's mind. However, if we go by the experts' views, while
investing, one needs to look at the returns and the rate of inflation. If the returns are higher than
inflation, then only one will be able to meet one's investment goal. Same rule needs to be
applied while investing in child education planning. Generally, people invest in traditional
insurance or bank fixed deposit (FD) for child education. However, the way FD returns have
gone down in recent years, it become important to know for an investor which type of
investment tool to choose, traditional tool or equity mutual funds?
Speaking on the calculations involved while choosing an investment tool for child
education planning DP Singh, Chief Business Officer at SBI Mutual Fund said, "When we
go for investing, we compare the returns given by the investment tool with the normal rate of
inflation. but, in the case of child education planning, there is a twist. Generally, we take around
5 per cent inflation growth during finding out the viability of an investment tool while deciding
whether it will help us meet our investment goal. But, in the case of child education, it has to
be 10 per cent because the education inflation is normally double of the overall inflation. So,
one should keep the inflation growth at 10 per cent while comparing the returns given by the
investment tool and the inflation growth while deciding child education plan."
(Dr. K. M. Sudha, 2020) Conducted research on “Comparative Study on Selected
Mutual Fund”. The objective of the study is to comparative performance analysis fir selected

36
mutual funds for five years and also risks and returns of mutual funds. This study evaluates the
analysis of returns that takes place for five years and their volatility based on investment. The
sources of data are secondary data. The tools used for analysis are simple average method and
standard deviation method and simple comparative analysis method and ranking method. The
findings that is not advisable to invest equity fund category as the market undergoing
fluctuations asset components are subject to high risk.
Dutta (2009) in his article compared the growth of Indian mutual funds industry with
that of the banking industry in the last two decades. Banking industry was undoubtedly ahead
of the mutual funds industry in terms of size but mutual finds industry had gained momentum
in the past few years. Gross mobilization by the mutual funds industry picked up post 1999 by
74.03% Although net resource mobilization by mutual funds industry as on 2006 over 1993
had increased ut a CAGR of 13.37% lower than the growth of deposit of all scheduled
commercial banks over the same period ie. 16.42% in the post 1999 scenario there was striking
increase in the net resource mobilization. Against outflow of 950 crores during the year 1989-
99 there was a huge inflow of 18960 crores during the following year 1999- 00. To stay at par
with international standard the article suggested that the Indian mutual funds industry should
increase penetration, diversify products and use better risk mitigation techniques.

37
 CHAPTER III: RESEARCH METHODOLOGY

Research Methodology Introduction

Research comprises defining are and redefining problems, formulating hypothesis or
suggested solution, organizing, and evaluating data and making deductions, and reaching
conclusions, and at last carefully testing the conclusion to determine whether they fit the
formulating hypothesis.
Research methodology is a very organized and systematic way through which a
particular case or problem can be solved efficiently. It is a step -by-step logical process,
which involves.
In this research, the methodology section indicates that how conduct the research.
This includes data collected from people, sample of study and methods cover in primary
research. So, we mention below the detail information about it.

Research is one of the most efficient and accurate methods for finding information
about a specific topic.

Research methodology is the specific procedures or techniques used to identify, select,

process and analyse information about a specific topic.
RATIONAL BEHIND THE TOPIC STUDY
The SBI bank is one of the fastest growing banks in the country and offers
abundance growth opportunity to the mutual fund & fixed deposit. When compared with
the developed foreign countries, the SBI bank has achieved only a little because of the lack
of MF & FD awareness, ineffective marketing strategies, poor affordability and low
investment in MF products. The study is basically intended to know, which option gives
the best returns to between mutual fund & fixed deposits.
DATA COLLECTION:
Data Collection Is a Crucial Element of Statistical Research. The Process Involves
Collecting Information from Available Sources to Come Up with Solutions for a Problem.
The task of data collection begins after a research problem has been defined.
There Are Two Methods of Data Collection: Primary Data Collection Methods and
Secondary Data Collection Methods.
Primary Data: The primary data is the data which is gained or controlled with the personal
interviews and detailed questionnaires about the topic with the managers.

38
Secondary Data: Financial research is the systematically designed, collection and analysis of
data and finding aspects of the company.
In this study data will be collected through secondary data collection method.

Secondary Data:
Secondary data in research methodology is any information or statistics that researchers
have already collected through their primary resources.
Secondary Data Collection Refers to Gathering Information That’s Already Available.
One Of the Most Popular Methods of Collecting Secondary Data Is by Using the Internet.
The sources of secondary data are articles, online sites, websites etc.
There Are Two Types of Secondary Data Collection—Qualitative Secondary Data
Collection and Quantitative Secondary Data Collection. Qualitative Data Deals with The
Intangibles and Covers Factors Such As Quality, Colour, Preference Or Appearance.
Quantitative Data Deals with Numbers, Statistics and Percentages

SOURCE OF DATA:
The sources of data comprise a secondary data. Secondary data was collected from
various sources such as: the websites, articles, online sites etc.

39
 CHAPTER IV: DATA ANALYSIS & INTERPRETATION

Data Analysis and interpretation is the process of inspecting, cleaning, transforming

and modeling data with the goal of discoveries useful information, suggesting conclusion and
supporting decision making. Data interpretation is that in which we analysis the whole
collected data & tries to give it in simple words to be understandable.

FIXED ASSETS CALCULATORS AND MUTUAL FUND CALCULATOR IN

GROWW:

Calculations for investment Amount 1,00,000 for 5 Years.

40
INTERPRETATION:
The above comparison between the fixed deposit returns calculator and mutual funds returns
calculator in GROWW for the investment of amount Rs. 100000 for 5 years.
It has been seen that after 5 years, fixed deposits give the rate of returns of 6.5% and
in mutual funds the expected return is 12 %.

41
COMPARISION BETWEEN FIXED ASSETS AND MUTUAL FUND SCHEMES OF
SBI:
• SBI FD VS SBI Focused Equity Fund (G)

Comparision Between
SBI Focused Equity Fund Growth State Bank of India FD

Returns
5.2% 5.25%
6M CAGR 6M Int. rate

19.7% 6.8%
1Y CAGR 1Y Int. rate

22.7% 6.5%
3Y CAGR 3Y Int. rate

12.4% 6.5%

42
 5Y CAGR 5Y Int. rate

16.1% 6.5%
10Y CAGR 10Y Int. rate

Key Factors
Very High Risk AAA (Stable)
Risk Factor CRISIL Rating

₹ 26,573 Cr ₹ 2 Cr
AUM in Cr. Max Deposit in Cr.

S&P BSE 500 India TR INR Yes

Benchmark DICGC Protected?

No exit load if withdrawn after 1 Year(s) 0-1%

Exit Load Withdrawal Charges

1.0% if withdrawn within 1 Year(s) Not Available

Withdrawal Conditions Withdrawal Conditions

Info
₹ 5,000 ₹ 1,000
Minimum Lumpsum Minimum Deposit

No Lock-in NA
Lock-in Lock-in

INF200K01370 State Bank of India FD

ISIN Scheme Name

Oct 11, 2004 1955

43
 Launched Launched

INTERPRETATION:

The comparison between the SBI Focused Equity Fund Growth and State Bank of
India FD. It has been seen that SBI Focused Equity Fund Growth gives 1.2% 6M CAGR while
6M Int. rate of State Bank of India FD is 5.25%. SBI Focused Equity Fund Growth gives
11.2% 1Y CAGR while 1Y Int. rate of State Bank of India FD is 6.8%. SBI Focused Equity
Fund Growth gives 21.7% 3Y CAGR while 3Y Int. rate of State Bank of India FD is 6.5%.
SBI Focused Equity Fund Growth gives 12% 5Y CAGR while 5Y Int. rate of State Bank of
India FD is 6.5%. SBI Focused Equity Fund Growth gives 15.6% 10Y CAGR while 10Y Int.
rate of State Bank of India FD is 6.5%.

The risk factors has Very High Risk in SBI Focused Equity Fund Growth while
CRISIL Rating of State Bank of India FD is AAA (Stable).

• SBI FD VS SBI Bluechip Fund (G)

44
 Comparision Between
SBI Bluechip Fund Regular Growth State Bank of India FD

Returns
7.2% 5.25%
6M CAGR 6M Int. rate

27.3% 6.8%
1Y CAGR 1Y Int. rate

26.2% 6.5%
3Y CAGR 3Y Int. rate

12.3% 6.5%
5Y CAGR 5Y Int. rate

15.5% 6.5%
10Y CAGR 10Y Int. rate

Key Factors
Very High Risk AAA (Stable)
Risk Factor CRISIL Rating

₹ 34,042 Cr ₹ 2 Cr
AUM in Cr. Max Deposit in Cr.

S&P BSE 100 India TR INR Yes

Benchmark DICGC Protected?

No exit load if withdrawn after 1 Year(s) 0-1%

Exit Load Withdrawal Charges

45
 1.0% if withdrawn within 1 Year(s) Not Available
Withdrawal Conditions Withdrawal Conditions

Info
₹ 5,000 ₹ 1,000
Minimum Lumpsum Minimum Deposit

No Lock-in NA
Lock-in Lock-in

INF200K01180 State Bank of India FD

ISIN Scheme Name

Feb 14, 2006 1955

Launched Launched

INTERPRETATION:

The comparison between the SBI Bluechip Fund Regular Growth and State Bank
of India FD. It has been seen that SBI Bluechip Fund Regular Growth gives 7.2% 6M CAGR
while 6M Int. rate of State Bank of India FD is 5.25%. SBI Bluechip Fund Regular Growth
gives 27.3 % 1Y CAGR while 1Y Int. rate of State Bank of India FD is 6.8%. SBI Bluechip
Fund Regular Growth gives 26.2 % 3Y CAGR while 3Y Int. rate of State Bank of India FD
is 6.5%. SBI Bluechip Fund Regular Growth gives 12.3% 5Y CAGR while 5Y Int. rate of
State Bank of India FD is 6.5%. SBI Bluechip Fund Regular Growth gives 15.5% 10Y CAGR
while 10Y Int. rate of State Bank of India FD is 6.5%.

The risk factors has Very High Risk in SBI Bluechip Fund Regular Growth while
CRISIL Rating of State Bank of India FD is AAA (Stable).

• SBI FD VS SBI Overnight Fund (G)

46
 Comparision Between
SBI Overnight Fund Regular Plan Growth State Bank of India FD

Returns
3.2% 5.25%
6M CAGR 6M Int. rate

5.9% 6.8%
1Y CAGR 1Y Int. rate

4.1% 6.5%
3Y CAGR 3Y Int. rate

4.6% 6.5%
5Y CAGR 5Y Int. rate

6% 6.5%
10Y CAGR 10Y Int. rate

47
 Key Factors
Low Risk AAA (Stable)
Risk Factor CRISIL Rating

₹ 20,960 Cr ₹ 2 Cr
AUM in Cr. Max Deposit in Cr.

CRISIL Overnight Index TR INR Yes

Benchmark DICGC Protected?

No exit load if withdrawn after 0 Year(s) 0-1%

Exit Load Withdrawal Charges

- Not Available
Withdrawal Conditions Withdrawal Conditions

Info
₹ 5,000 ₹ 1,000
Minimum Lumpsum Minimum Deposit

No Lock-in NA
Lock-in Lock-in

INF200K01LQ9 State Bank of India FD

ISIN Scheme Name

Oct 01, 2002 1955

Launched Launched

INTERPRETATION:

48
 The comparison between the SBI Overnight Fund Regular Plan Growth and State
Bank of India FD. It has been seen that SBI Overnight Fund Regular Plan Growth gives 3.2%
6M CAGR while 6M Int. rate of State Bank of India FD is 5.25%. SBI Overnight Fund
Regular Plan Growth gives 5.9 % 1Y CAGR while 1Y Int. rate of State Bank of India FD is
6.8%. SBI Overnight Fund Regular Plan Growth gives 4.1 % 3Y CAGR while 3Y Int. rate of
State Bank of India FD is 6.5%. SBI Overnight Fund Regular Plan Growth gives 4.6 % 5Y
CAGR while 5Y Int. rate of State Bank of India FD is 6.5%. SBI Overnight Fund Regular
Plan Growth gives 6 % 10Y CAGR while 10Y Int. rate of State Bank of India FD is 6.5%.

The Risk Factors has Low Risk in SBI Overnight Fund Regular Plan Growth while
CRISIL Rating of State Bank of India FD is AAA (Stable).

• SBI FD VS SBI Large & Midcap Fund (G)

Comparision Between
SBI Large & Midcap Fund Regular Growth State Bank of India FD

49
 Returns
6.6 % 5.25%
6M CAGR 6M Int. rate

30.3% 6.8%
1Y CAGR 1Y Int. rate

31% 6.5%
3Y CAGR 3Y Int. rate

14.9% 6.5%
5Y CAGR 5Y Int. rate

17.6% 6.5%
10Y CAGR 10Y Int. rate

Key Factors
Very High Risk AAA (Stable)
Risk Factor CRISIL Rating

₹ 10,512 Cr ₹ 2 Cr
AUM in Cr. Max Deposit in Cr.

IISL Nifty Large Midcap 250 TR INR Yes

Benchmark DICGC Protected?

0.1% if withdrawn within 30 Day(s) 0-1%

Exit Load Withdrawal Charges

No exit load if withdrawn after 30 Day(s) Not Available

Withdrawal Conditions Withdrawal Conditions

50
 Info
₹ 5,000 ₹ 1,000
Minimum Lumpsum Minimum Deposit

No Lock-in NA
Lock-in Lock-in

INF200K01305 State Bank of India FD

ISIN Scheme Name

May 25, 2005 1955

Launched Launched

INTERPRETATION:

The comparison between the SBI Large & Midcap Fund Regular Growth and State
Bank of India FD. It has been seen that SBI Large & Midcap Fund Regular Growth gives 6.6
% 6M CAGR while 6M Int. rate of State Bank of India FD is 5.25%. SBI Large & Midcap
Fund Regular Growth gives 30.3 % 1Y CAGR while 1Y Int. rate of State Bank of India FD
is 6.8%. SBI Large & Midcap Fund Regular Growth gives 31 % 3Y CAGR while 3Y Int. rate
of State Bank of India FD is 6.5%. SBI Large & Midcap Fund Regular Growth gives 14.9 %
5Y CAGR while 5Y Int. rate of State Bank of India FD is 6.5%. SBI Large & Midcap Fund
Regular Growth gives 17.9 % 10Y CAGR while 10Y Int. rate of State Bank of India FD is
6.5%.

The Risk Factors has Very High Risk in SBI Large & Midcap Fund Regular Growth
while CRISIL Rating of State Bank of India FD is AAA (Stable).

• SBI FD VS SBI Equity Savings Fund (G)

51
 Comparision Between
SBI Equity Savings Regular Growth State Bank of India FD

Returns
5.6% 5.25%
6M CAGR 6M Int. rate

13.5% 6.8%
1Y CAGR 1Y Int. rate

13.9% 6.5%
3Y CAGR 3Y Int. rate

8.3% 6.5%
5Y CAGR 5Y Int. rate

52
 - 6.5%
10Y CAGR 10Y Int. rate

Key Factors
Moderately High risk AAA (Stable)
Risk Factor CRISIL Rating

₹ 2,256 Cr ₹ 2 Cr
AUM in Cr. Max Deposit in Cr.

NIFTY Equity Savings TR INR Yes

Benchmark DICGC Protected?

0.1% if withdrawn within 15 Day(s) 0-1%

Exit Load Withdrawal Charges

No exit load if withdrawn after 15 Day(s) Not Available

Withdrawal Conditions Withdrawal Conditions

Info
₹ 5,000 ₹ 1,000
Minimum Lumpsum Minimum Deposit

No Lock-in NA
Lock-in Lock-in

INF200KA1DA4 State Bank of India FD

ISIN Scheme Name

May 27, 2015 1955

Launched Launched

INTERPRETATION:
53
 The comparison between the SBI Equity Savings Regular Growth and State Bank
of India FD. It has been seen that SBI Equity Savings Regular Growth gives 5.6 % 6M CAGR
while 6M Int. rate of State Bank of India FD is 5.25%. SBI Equity Savings Regular Growth
gives 13.5 % 1Y CAGR while 1Y Int. rate of State Bank of India FD is 6.8%. SBI Equity
Savings Regular Growth gives 13.9 % 3Y CAGR while 3Y Int. rate of State Bank of India
FD is 6.5%. SBI Equity Savings Regular Growth gives 8.3 % 5Y CAGR while 5Y Int. rate of
State Bank of India FD is 6.5%.

The Risk Factors has Moderately High risk in SBI Equity Savings Regular Growth
while CRISIL Rating of State Bank of India FD is AAA (Stable).

54
 CHAPTER V: FINDINGS AND SUGGESTIONS

• Mutual funds have the potential to generate marginally higher returns (post tax) than
fixed deposits.
• It is important for an investor to assess their understanding of risk before choosing a
mutual fund.
• Seminars and promotional activities should be held to increase knowledge and
awareness among the peoples related with market related schemes.
• FDs are taxed even when the interest is being accumulated. Also, when it comes to
beating inflation, mutual funds do a pretty good job.
• In terms of fixed deposits, SBI Bank offers various options such as traditional
fixed deposits, tax-saving fixed deposits, and recurring deposits. The bank's fixed
deposit rates are competitive and vary depending on the deposit amount, tenure,
and type of fixed deposit chosen.
• Before investing in mutual funds or fixed deposits, it is important to assess your
investment objectives, risk appetite, and investment horizon. You should also
evaluate the past performance of the mutual funds or fixed deposits you are
considering and consider the associated fees and charges.
• It is always advisable to consult with a financial advisor or investment
professional before making any investment decisions.

55
 CHAPTER VI: CONCLUSION AND RECOMMENDATION

• It is important for an investor to assess their understanding of risk before choosing

a mutual fund.
• Mutual Fund Company needs to give the training of the Individual Financial
Advisors about the Fund/Scheme and its objective, because they are the main
source to influence the investors.
• If the investor prefers guaranteed or predictable returns, then debt funds that invest
in government securities are a better option.
• Investors need to assess their understanding of risk along with the return
expectations and choose the fund that best fits their requirement.
• Depending on your investment objective, understanding of the instruments and risk
tolerance levels, you can pick a suitable instrument.
• If you are interested in mutual funds, you can start with the less risky ones and then
slowly graduate to the riskier (and more rewarding) ones. The key is to learn to
digest volatility.
• SBI mutual fund are link with share market and investors are not taking advice
from expert advisor to guide them for their investment in mutual fund so it creates
the difficulty to select the mutual fund scheme beneficial for investors.

56
 BIBLIOGRAPHY AND REFERENCES

https://scripbox.com

https://groww.in

https://en.m.wikipedia.org

https://www.sbimf.com

www.google.com

https://www.sbifd.com

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