New Delhi: With the debt mutual fund schemes now under the tax ambit, the attractiveness of the product has reduced as High Net worth Individuals (HNIs) are favouring bank fixed deposits (FDs) over such funds, according to a report by Motilal Oswal Financial Services on Thursday.
In addition, interest rates on bank deposits have increased significantly over the past one year. This led to HNIs getting inclined towards bank fixed deposits over debt mutual funds, Nitin Aggarwal, Head of BFSI Research at Motilal Oswal Institutional Equities, said.
Although HNIs comprehend the advantages of mutual funds over other financial products, past problems in the sector still concern them.
The report is based on the inputs of large mutual fund distributors, having an asset under management (AUM) in excess of Rs 1,000 crore, and institutional sales representatives.
