Aiming to beat fixed deposit yields? Here’s what investors can consider instead of FDs

A portfolio of AAA rated NBFCs and HFCs can yield returns of around 8%. (Image source: Freepik) What investment options offer higher returns than fixed deposits? Interest rates on fixed deposits are high, but if you as an investor want to exceed the returns of FDs, borrowing money is one option you can consider.
According to a report in ET, Aditya Birla Sun Life Mutual Fund offers a range of target maturity funds that may be an attractive investment option for investors seeking low-cost passive debt products. are. These funds can generate higher returns than fixed deposits. While maintaining high security over an investment period of 15 to 33 months.
The fund house has launched seven target maturity funds with different tenors as it believes yields at the lower end of the yield curve are advantageous. By investing in these schemes, investors can earn spreads of 50 to 80 basis points over government bonds and term deposits.
Two of these schemes have already been launched through New Fund Offers (NFOs) and five more are expected to be introduced soon. The portfolios of these schemes will consist of securities of 10-12 companies, including AAA-rated non-banking financial companies (NBFCs) and housing finance companies (HFCs), with exposure to a single company of up to 15%.
Financial planners say these target maturity funds offer investors the opportunity to earn higher returns than bank deposits while maintaining high liquidity. The scheme has no lock-in period or exit load, allowing investors to redeem units on any business day.
Target Maturity Funds are passive bond funds that track an index of fixed income products and closely replicate the composition of the underlying index. Unlike other open-ended mutual fund schemes, these funds have a specific maturity date and investors holding units in the fund receive their principal amount on maturity.
Bank fixed deposits with a term of 1-3 years can offer investors a yield of 7-7.25%, while a portfolio of AAA-rated NBFCs and HFCs can yield returns of around 8%. Considering an expense ratio of 15 basis points, investors could potentially earn 60 to 80 basis points more than fixed deposits. Financial planners suggest this product may be suitable for investors who prioritize liquidity and have short-term goals.
Amol Joshi, founder of Plan Rupee, told ET, “This product is designed for people who want fixed returns, are within the tax bracket, and can benefit from securing funds at high interest rates before the rate cut cycle starts.” This is effective for investors who want to enjoy the benefits of

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