PM Narendra Modi holds 90% of his assets in fixed deposits (FDs), according to the Election Commission of India.

While we don’t have recent data, the last SEBI survey in 2017 found 95% of Indians to have money saved in FDs.

Not really. Debt funds might be a better option than FDs. We explain the reasons in the next few slides.

1-year SBI FD is delivering 6.25%; in contrast, the average returns of debt funds range from 6.1 to 7.56% across various categories.

Since past returns don't guarantee future performance, we looked at the debt funds’ yield-to-maturity (YTM). Even then, debt funds have done better than FDs.

Debt funds also allow you to defer paying tax, where gains are taxed only upon selling the fund, unlike FDs, where interest is taxed annually.

In addition, debt funds offer greater liquidity and penalty-free early withdrawals.

We suggest you look at debt funds that don't overbuy longer-dated bonds. To learn why and what our preferred choice of debt fund is, click below to read the full story.