Debt Investing on WebNotes

Debt mutual fund vs bank fixed deposit (post-2023 tax regime)

Tue, 12 May 2026 00:00:00 +0000

The Finance Act 2023 introduced a fundamental change to the taxation of debt mutual funds in India, effective from 1 April 2023. Prior to this amendment, gains on debt mutual fund units held for more than 36 months were classified as long-term capital gains (LTCG) and taxed at 20% with indexation benefit. From 1 April 2023, gains on specified mutual funds (those with domestic equity exposure of 35% or less) are taxed at the investor’s applicable income tax slab rate irrespective of holding period, under the new Section 50AA of the Income Tax Act, 1961.

Liquid fund vs savings account

Tue, 12 May 2026 00:00:00 +0000

Liquid mutual funds and bank savings accounts are both commonly used for parking short-term cash in India. Liquid funds are debt-oriented mutual fund schemes regulated by the Securities and Exchange Board of India , investing in money market instruments with a maturity of up to 91 days. Bank savings accounts are deposit products regulated by the Reserve Bank of India (RBI), offering a fixed or floating interest rate on balances maintained.

Both instruments provide ready access to funds, but they differ in return potential, insurance coverage, taxation, and minimum balance requirements.

Liquid fund vs sweep-in FD

Tue, 12 May 2026 00:00:00 +0000

A sweep-in fixed deposit (also called an auto-sweep FD or sweep facility) is a product offered by banks in India that automatically converts savings account balances above a specified threshold into short-term fixed deposits, earning the higher FD rate while retaining the liquidity of the savings account. When the account holder initiates a withdrawal or payment that exceeds the savings balance, the linked FD is automatically broken in LIFO or FIFO order to fund the transaction.