FD vs short-duration funds: What to choose in the no-indexation era?

Fixed deposits (FDs) are becoming increasingly appealing due to their enticing interest rates. Meanwhile, debt funds have lost the indexation benefit, thus raising the question: Are FDs and debt funds, particularly short-duration debt funds, now on a level playing field? Which of them might be a wiser investment choice? Let's evaluate our options. Has indexation removal benefitted FDs? The removal of indexation benefit from debt funds is disheartening, especially as the post-tax return gap between short-duration funds and FDs has notably narrowed. However, these funds (even their regular plans) outperformed FDs. In our analysis, where if there was no indexation and the tax treatment for FDs and short-duration funds were the same, we found that the regular