If I am not going to invest in a fixed deposit (FD) scheme, I will prefer mutual funds (MFs) also known as unit trusts. Mutual fund is an investment consisting of a group's money collected from different investors for the purpose of investing in securities and legal teams or organizations such as stocks, bonds, money market instruments and other assets. Mutual funds are managed by professional and legal money managers, who help the investor allocate the fund's investors. The equity share can be purchased or redeemed as needed at the current net asset value (NAV) of the fund. NAVs continue to change based on the fund's holdings resulting from performance aggregation, this will affect the investor's capital or income profit or loss. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original EssayI choose mutual funds (MFs) as my investment different from fixed deposits (FDs) is because MFs have the potential to earn high returns while FDs rates are not affected. For being a fund investor you will not get any product from the company, actually investors buy part of the property and assets from the MF company. Mutual fund companies sell government bonds, corporate bonds will receive payment of a fixed rate of return. In terms of risk, fixed deposits have minimal risk where as mutual funds have higher market risk. But the risks can be mitigated to some extent, mutual funds are managed by professionals. Well, mutual funds have higher market risks, but it also means they get higher returns too. Next, liquidity for mutual funds is higher than that of fixed deposits because fixed deposits have a fixed time period, as the name suggests, and generally have low liquidity until the deposit's tenure ends. In case of early withdrawals, fixed deposit holders have to pay a penalty and lose a portion of the expected returns. MFs charge an exit fee only if investments are withdrawn, in a very short period, normally less than a year. Some MF schemes offer high liquidity. Funds can be withdrawn at any time, without any exit charges or additional costs. Please note: this is just an example. Get a custom paper from our expert writers now. Get a Custom Essay Next, some investors do not have much capital or liquidity but still want to purchase the investment for income or gain. Investment costs are low for mutual funds. These are the benefits offered to investors who are not wealthy enough or do not have a large amount of cash. Some investors expect the building or house to cost a lot of money due to expenses. The market price of the building depends on the brokerage company, the price includes the commissions charged, up to hundreds of thousands of dollars. However, mutual funds can be significantly less expensive. A mutual fund manager will make the necessary trades to maintain the mutual fund portfolio, but the investor may only be responsible for a low expense. Sometimes investors will face some problems in investing which will become more expensive than buying individual stocks. Investors in mutual funds.