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Difference between Bank Deposits and other Investments


No Bank Deposits Other Investments
1 Bank deposits give an almost assured, fixed and uninterrupted returns The returns from equities, mutual funds are not assured. The company deposits and debentures may stop servicing of interest any time due to losses.
2 It is easy to choose a deposit scheme at a Bank as they are simple and can be understood by a layman The investments in equities and mutual funds is much more complicated and complex for a layman.
3 Bank deposits are one of the safest investments and risk of default is minimal. Investments in equities, company deposits, debentures, mutual funds etc. is more risky.
4 There are no rebates available under Income Tax for deposits in Banks, except under special schemes now floated by Banks for availing the income tax rebates. Deposits in schemes like NSC, PPF, Infrastructure allows rebates in Income Tax.
5 Bank deposits gives comparatively lower rate of returns. Company Deposits, debentures, equities can give higher returns, but have higher degree of risk.
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