Mutual fund Vs money lending Vs FD

Hi

I have 5 lacs to invest. I have gain little knowledge about mutual fund.

Equity fund, debt fund , balanced fund etc.


1) My father and his frnds suggest to give person to person on 1% interest of month so every month I'll get 5k.

2) Bank manager suggest me go for mutual funds

3) some old bank employee suggest dont go for mutual funds you'll lose money amd its risky go for FD.


M so confused what do to. Kindly give me suggestion.

And advantage and disadvantage of all of these.


Thank you


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Hi

I have 5 lacs to invest. I have gain little knowledge about mutual fund.

Equity fund, debt fund , balanced fund etc.


1) My father and his frnds suggest to give person to person on 1% interest of month so every month I'll get 5k.

1%pm compounded monthly is like 13% per annum which is much higher than bank FD but "safety of capital"...if your capital is safe with some security like gold then it is good idea.
( i expect such intt is not taxed)

2) Bank manager suggest me go for mutual funds.
Mutual funds are good option and can give returns but are better to hold for long run like 10+ years to benefit form compounding nature of stock market returns.

3) some old bank employee suggest dont go for mutual funds you'll lose money amd its risky go for FD.
FD now give around 8% less taxes. if you are tax payer effective return may be lower.
..
you may also look for ppf which will have higehr tax free return and u can open account in name of yourself and family member and each account can be deposited with 1.5 lakhs.
.
if you have like 10-15 years invt period in mind you may invest entire amount in index funds to have long term gains and tax free benefits.

M so confused what do to. Kindly give me suggestion.

And advantage and disadvantage of all of these.