Fixed Deposit vs Chit Fund

The basic distinction between a chit Fund and Fixed Deposit is deposited amount depends on the maturity and offers a fixed return supported by the rate of interest. On the opposite hand, the chit funds have relatively high-interest rates than fixed deposits, and therefore the returns are paid monthly in the kind of dividends

Many people who invest in FDs don't even grasp that they ought to think about inflation, interest rates, and taxation before zeroing in on an investment decision. therefore rather than gaining cash from their investment, they find themselves losing it.

Now, we may be thinking – “If bank-fixed Deposits aren't a decent place to invest the cash however else ought to I be saving my cash, smartly?”i.e chit fund for more returns.

What is a chit fund?

A chit fund could be a rotating saving scheme, conjointly referred to as chitty, chit, or Kuree. it's a superb money instrument that is a saving yet a borrowing tool. As a saving theme, the check fund offers smart returns on investment. As a borrowing tool, it is a reliable supply of funds in emergencies or whenever the necessity for cash arises.

In a chit fund scheme, a group of individuals comes along to contribute a hard and fast quantity of cash each month for a hard and fast amount.

What Is a Fixed Deposit?

A fixed deposit (FD) or a term deposit could be a money instrument offered by banks that offers investors a better rate of interest than a regular bank account till the date. FDs guarantee the investor a fixed rate of interest, and reciprocally, the investor agrees to not withdraw or access their funds for a fixed amount. in an exceedingly fixed deposit, the interest is just paid at the terrible finish of the investment amount.

Chit Fund Vs Fixed Deposit

The major difference between a Chit Fund and Fixed Deposit is the amount deposited relies on maturity and offers a fixed return supported by the interest. On the opposite hand, chit funds have relatively high-interest rates than fixed deposits, and therefore the returns are paid monthly in the form of dividends.

A quick comparative look at chit fund vs fixed deposit to assist you to get a good plan of the pros and cons of selecting a particular option.

Fixed Deposit

  • A Fixed deposit is accepted for a pre-determined period. Interest paid by banks ranges between seven.5-9.5% and is dependent on government regulation.
  • The interest earned from fixed deposits will either be taken out sporadically (monthly/quarterly/half yearly/yearly) or an investor will earn cumulative interest that is paid at the top of the term amount. fixed deposits offered by the company sector carry a better rate of interest however are risky and an investor can get to take an informed decision. the whole principal amount + interest came solely on maturity.+Liquidity. 

Chit Fund

  • The principle amount can't be employed by the capitalist if he must incur any unforeseen expenditure. If the investor opts for an accumulative interest, the whole amount comes solely on the maturity of the mounted deposit. a discount on the opposite hand will facilitate an investor by paying him a rate of interest between 12-16%.
  • The interest is paid within the kind of dividends. If an investor encompasses a lump sum amount, he will invest constantly in an exceedingly vacant chit.
  • By investing in a chit fund, the amount is shorter; the investor will participate in an auction and use those funds for any planned or unplanned expenditure or wait till the top of the chit and luxuriate in higher dividends. Pays a competitive rate of interest than banks. Investors will get returns as high as 12-15%.    
  • The interest is paid in the form of a dividend each month. The chit will be used for any planned or unplanned expenditure Illiquid. 


Investing in an exceedingly chit fund might lead to higher profits than FDs. however, do your due diligence and select your chit fund wisely. make sure that your chit fund company is either passed by the regime or registered underneath The Chit Funds Act. While Investing in Fixed deposits, we have assurance for the amount deposited.

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The home loan EMI calculator helps you check your home loan EMI before you apply for a loan. It is a money designing tool that permits you to form an informed call. an EMI calculator for home loans helps you complete complicated calculations accurately yet as quickly.

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The home loan interest rates offered by SBI begin from 7.55% p.a. ahead for tenures up to thirty years and loan amounts up to 90th of the property's value.