As a form of investment, mutual funds are often compared with deposits. Deposits as the simplest form of investment offered by banks are considered suitable for those seeking safety. Is this true?

Mutual funds can provide higher returns

Deposits promise guaranteed returns from the outset, with interest rates typically ranging from 4% to 6%. You can achieve greater returns because your money is invested across multiple types of investment products, although money market funds also contain some deposits. Your money is invested in deposits at several banks simultaneously without needing to be a customer of each one.

The minimum investment amount for mutual funds is also lower

You can begin investing in mutual funds with a very low initial investment, starting from just one hundred thousand Rupiah. This means you can start investing anytime, as early as possible without waiting for capital to accumulate. In mutual funds, there is no difference in the percentage return between small and large amounts. Both small and large capital receive the same percentage return. Deposits, on the other hand, require you to have substantial capital, as the minimum investment is generally Rp1 million. Additionally, deposits offer different percentage returns for large and small amounts.

Funds from mutual funds can be withdrawn anytime without penalty

Money stored in deposits cannot be withdrawn at will. There is a set period that must be fulfilled before the money can be withdrawn without incurring a penalty. Penalties are charged if withdrawal occurs before the maturity date. This certainly poses a risk in case of emergencies requiring large sums of money suddenly.

Mutual fund returns are not guaranteed

Unlike deposits which have clear return values with fixed percentages, mutual funds provide returns that fluctuate depending on economic conditions. However, a credible Investment Manager will ensure that the returns you receive remain profitable. Remember, an Investment Manager's credibility also depends on the returns generated, so they will certainly strive to provide the best for you.

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