What is the difference between returns offered by bank FD and banking funds?
Bank fixed deposits (FDs) have nothing in common with banking funds. So, strictly speaking, you cannot compare them or the returns offered by them. Bank guaranty interest on FDs and they are mostly safe. Banking mutual fund schemes are sector funds that invest in companies in banking and financial services. Sector funds are risky and they do not guarantee any returns. Banking fund category has offered -5.36 per cent returns in the last year, 11.28 per cent in the last three years, 4.09 per cent in the last five years. Banks offer around 7-8 per cent interest on a one-year fixed deposit.