Which is Better – FD, Mutual Fund, SIP or ULIP?

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Kotak E-Invest Plan

    Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.


Which is Better – FD, Mutual Fund, SIP or ULIP?

  • 29th Apr 2022
  • 2,628

Which is Better – FD, Mutual Fund, SIP or ULIP?

​The popularity of investment tools has soared in the last decade. With a majority of millennials in the workforce and the new Gen-Z following in suit, investment has never been more vital. With so many investment options available, choosing one that meets all of your needs and works best to amass money while offering the best returns can be difficult. It can be confusing to make a decision when there are a lot of discussions on which is better: ULIP vs. Mutual Fund vs. SIP vs. Fixed Deposit. If you are not sure which investment option is best for your needs, we’ll walk you through some of the most popular choices and help you make the right selection.

All About ULIP vs Mutual Fund vs SIP vs Fixed Deposit

Unit Linked Insurance Policy (ULIP)

A unique investment product, the ULIP combines the benefits of both investment and insurance coverage into a single scheme. A part of the premium is used to finance life insurance, while the rest is invested in other market instruments including stocks, shares, and bonds. It also offers tax benefits under Section 80C of the Income Tax Act, 1961.

Advantages of Investing in ULIP

Benefits Are Tripled

ULIPs provide wealth building, tax benefits, and life insurance coverage in one package. 

Partial Withdrawal

ULIPs feature a 5-year required lock-in period, after which you can withdraw a portion of your money as needed.

Selection of Assets

You can invest and allocate your assets in investing instruments such as life equities, stocks, and debt funds based on your risk tolerance.

Mutual Funds

A mutual fund is a form of financial instrument that invests in securities such as bonds, money market instruments, equities, and other assets by pooling money from multiple investors. Professional money managers administer the funds, allocating assets and attempting to generate investment income or income for the fund’s investors.

Advantages of Investing in Mutual Funds

Diversification is one of the most apparent benefits of mutual fund investment. It’s the technique of distributing a single investment over a variety of asset types. Diversification allows us to build a diverse portfolio that separates the various industries’ headwinds.


To satisfy your financial needs, you can easily sell mutual funds. After the money is liquidated, it is placed in your bank account within a few days. There are other mutual funds that disburse money more quickly.

Professional Portfolio Manager

For individuals who may not have the time or ability to undertake their own analysis and asset selection, a mutual fund is a viable option. A professional fund manager handles everything and decides what to do with your money based on your risk tolerance.

Systematic Insurance Plan (SIP)

A SIP is a strategy for investing in mutual funds. It is a way of investing a certain amount of money into a mutual fund account on a regular basis. You can make payments on a monthly, quarterly, or annual basis, depending on your convenience and financial goals.

Advantages of Investing in SIP

Begin small and expand

You may start with a small investment fund of ₹500 and progressively increase the amount based on your requirements and income development, with the option of reaping the benefits of compounding after a certain length of time.

Habitual Savings

It helps you to adopt a disciplined savings practice for long-term wealth/asset growth by automatically deducting a defined sum from your account.

Protect Yourself From Market Risks

SIPs safeguard your money from current market volatility and hazards because they are long-term investment products.

Fixed Deposit (FD)

A fixed deposit is a financial product offered by banks or non-bank financial companies (NBFCs) that pay a greater interest rate than conventional savings account till the maturity period.

Advantages of Investing in Fixed Deposit

Fixed Returns

FD has a predetermined rate of return. When you open an FD, the rate of interest you’re offered stays the same throughout your chosen time period. Even if interest rates in the rest of the market fall, your FD interest returns will remain untouched.

FD And Loan

An FD is a safe investment to have on hand in the event of a financial emergency. It’s simple to get a loan against a fixed deposit. Based on the bank, you may be able to borrow up to 95 per cent of the value of your fixed deposit.

Tenure Flexibility

The duration of FDs ranges from a week to ten years. You can buy in FDs for a period of time that corresponds to your commercial or personal requirements.

Wrapping up, each financial instrument has its own set of features and benefits. As a result, it’s critical to do your research before committing to an investment opportunity that meets both your personal and financial objectives.

- A Consumer Education Initiative series by Kotak Life

Also read

  • What's Better for Your Child's Education? Child Plans or Mutual Funds?

    Child plans in mutual funds give your child the secure financial future they deserve. In this manner, even if you cannot care for your child, they wil...

    Read more
  • Top 6 Investment Plans Available in India

    Safe and best investment plans to obtain high returns in 2020, make a choice from a variety of short term and long-term investment choices via the com...

    Read more
  • Building wealth through regular investing

    How to invest regularly to build wealth?

    Read more

Related Plans

  • Kotak Assured Income Accelerator

    Kotak Assured Income Accelerator

    Kotak Assured Income Accelerator ensures that you get Guaranteed Income every year on the same amount of savings and that the Guaranteed Income increa...

    Know more
  • Kotak Ace Investment

    Kotak Ace Investment

    Kotak Ace Investment Plan is designed with the clear objective of helping you accumulate wealth and provide you adequate life cover.

    Know more
  • Kotak Assured Pension

    Kotak Assured Pension

    Kotak Assured Pension is an annuity plan that promises to pay a regular stream of income on immediate basis or post deferment period for life, ensurin...

    Know more