Ask this question at any family dinner in Bangladesh and you will get four confident, contradictory answers. Your uncle swears by Sanchayapatra. Your colleague renews her FDR every year without thinking. Your cousin opened a DPS the day he got his first job. And someone's friend "made good money" in mutual funds — or lost it, depending on who is telling the story.
The truth is less dramatic and more useful: each of these is a tool, and each tool is built for a different job. The mistake most savers make is not choosing the "wrong" product — it is using one product for every goal.
This guide compares all four honestly: returns, safety, liquidity, tax treatment, and who each one genuinely suits.
(All rates below are indicative and change periodically. Verify current rates with your bank, the Department of National Savings, and fund managers before deciding.)
The Four Contenders, Briefly
Fixed Deposit Receipt (FDR). You lock a lump sum in a bank for a fixed term at a fixed interest rate — indicatively around 10% per year depending on the bank and tenure. Simple, familiar, predictable. The catch arrives at tax time: under the Finance Act 2026, FDR interest is taxed at your marginal rate — up to 30% for top-bracket earners.
Deposit Pension Scheme (DPS). A monthly deposit scheme with a bank, usually for 5–10 years, offering returns broadly similar to FDR rates. Its real strength is the discipline of forced monthly saving.
Sanchayapatra (National Savings Certificates). Government-issued savings instruments — historically the most popular choice in the country — offering government-backed returns of around 11.8% on popular instruments, with tax rebate eligibility. The trade-offs: purchase ceilings, lump-sum-only investment, reduced returns if you cash out early — and, under the Finance Act 2026, interest that is taxed at your marginal rate, up to 30%.
Mutual Funds. Professionally managed pools of investor money, regulated by the BSEC, invested in a diversified portfolio of stocks, bonds and money-market instruments. Crucially, "mutual fund" is not one risk level: fixed income funds sit at the low-risk end, balanced funds in the middle, and equity funds at the higher end (more on this below). Returns are market-linked — not guaranteed — but come with the highest long-term growth potential, strong tax-rebate headroom, and (for open-end funds) the ability to invest monthly via SIP or redeem at NAV when you need to. And under the Finance Act 2026, capital gains on your units are tax-free up to BDT 50 lakh for individual investors.
Side-by-Side Comparison
| Factor | FDR | DPS | Sanchayapatra | Mutual Funds (open-end) |
|---|---|---|---|---|
| Return potential | ~10%, fixed | ~9%, fixed | ~11.8%, fixed | By fund type: fixed income ~11%; balanced & equity market-linked, higher long-term potential (not guaranteed) |
| Capital safety | High (bank deposit) | High (bank deposit) | Highest (government-backed) | By fund type: low risk (fixed income) to high risk (equity); assets ring-fenced with trustee + custodian |
| Beats inflation? | Often barely | Often barely | Modestly | Best long-term potential |
| Investment style | Lump sum | Monthly | Lump sum only | Lump sum or monthly SIP |
| Liquidity | Penalty on early break | Penalty on early exit | Reduced return on early encashment | Redeem at NAV; no lock-in on open-end funds |
| Tax rebate eligible? | No | Yes (up to ৳1.2 lakh) | Yes | Yes (up to ৳75 lakh) |
| Tax on earnings | Interest taxed at marginal rate (up to 30%) | Interest taxed at marginal rate | Interest taxed at marginal rate (up to 30%) | Capital gains tax-free up to ৳50 lakh; dividends taxed at 15% for individuals |
| Investment ceiling | None | Scheme limits | Government-set purchase limits | None |
| Who manages it | You choose the bank | You | Government pays fixed rate | Professional fund managers |
Not All Mutual Funds Carry the Same Level of Risk
Here is the nuance a single "Mutual Funds" column cannot show — and the one that matters most if market risk worries you. "Mutual fund" is a vehicle, not a risk level. What determines the risk is what the fund actually holds:
| Fund type | Risk level | What it mainly holds | Best suited for |
|---|---|---|---|
| Fixed income fund — e.g., Ekush Stable Return Fund | Low | Government securities, high-grade bonds and deposits | Stability and steady income (currently ~11%); a tax-smart alternative to FDR and Sanchayapatra |
| Balanced fund — e.g., Ekush First Unit Fund | Moderate | A managed mix of bonds and listed shares | Growth with a cushion; the middle path |
| Equity / growth fund — e.g., Ekush Growth Fund | High | Listed shares | Long horizons (10+ years) aiming for maximum growth |
A fixed income fund's NAV moves gently — it is built for savers who would otherwise renew an FDR, not for thrill-seekers. Risk levels are relative, of course: even a fixed income fund is not a guaranteed bank deposit. But painting every mutual fund with the equity brush is like calling every vehicle a racing car.
The After-Tax Reality: Same ৳1,00,000, Very Different Outcomes
Headline rates hide the number that actually matters: what you keep after tax. The Finance Act 2026 sharpened this picture considerably — interest from Sanchayapatra and FDR is now taxed at your marginal rate (up to 30%), while capital gains on mutual fund units remain tax-free up to BDT 50 lakh for individual investors.
Here is BDT 1,00,000 invested for one year by someone in the top 30% bracket:
| Instrument | Indicative rate | Gross earning | Tax | You keep |
|---|---|---|---|---|
| Ekush Stable Return Fund (capital gain) | 11.0% | ৳11,000 | ৳0 | ৳11,000 |
| Sanchayapatra (interest) | 11.8% | ৳11,800 | –৳3,540 | ৳8,260 |
| Bank FDR (interest) | 10.0% | ৳10,000 | –৳3,000 | ৳7,000 |
Notice what happened: Sanchayapatra's higher headline rate quietly lost to the fund's lower one — because the taxman takes 30% of one and nothing from the other. Same taka, very different tax. At lower brackets the gap narrows, but the direction never changes. Fund returns are indicative and market-linked, not guaranteed — yet whatever gain your units do earn enjoys the same tax-free treatment up to the ৳50 lakh threshold.
The Question Behind the Question: What Is the Money For?
The right instrument depends almost entirely on when you will need the money and what happens if it grows slowly.
Money you may need within a year — emergency fund. Keep it simple and liquid. A short-term FDR or even a high-quality savings account is fine here. Growth is not the goal; access is.
A fixed goal 3–5 years away — a wedding, a down payment. Predictability matters. Sanchayapatra (within your purchase limit) or a fixed-income oriented mutual fund both make sense. The fund adds monthly-investment flexibility and easier exit; the certificate adds a government guarantee.
Long-term wealth — retirement, children's education, 10+ years away. This is where fixed-rate products quietly fail. An FDR earning 10% before tax — roughly 7% after tax at the top bracket — while inflation runs near 8–9% is treading water at best: your balance grows, but what it can buy barely moves. Over a decade or more, a diversified equity or balanced mutual fund has historically offered the best chance of growing your purchasing power — precisely because you have the time to ride out market ups and downs.
The tax angle. If you pay income tax, tax treatment changes the math entirely — twice. On the way in, mutual funds offer the largest rebate headroom of any mainstream instrument (FDR interest earns no rebate at all; DPS qualifies only up to ৳1.2 lakh), and the Finance Act 2026 raised the qualifying allowance for mutual funds from ৳5 lakh to ৳75 lakh — on par with direct investment in listed securities — effectively a 10% head start before any market return. And on the way out, capital gains on fund units are tax-free up to BDT 50 lakh, while Sanchayapatra and FDR interest is taxed at your marginal rate; the same Act reduces the tax on an individual's dividend income to 15%. (We break down the full rebate math in our companion guide to investment tax rebates.)
"But Aren't Mutual Funds Risky?"
It is the most common objection, and it deserves a straight answer: yes, mutual fund returns move with the market, and no honest asset manager will promise you a fixed number.
But "risky" is often misunderstood in three ways.
First, "mutual fund" is a category, not a risk level. A fixed income fund holding government securities and high-grade bonds behaves nothing like an equity fund riding the stock market — its NAV moves gently, which is exactly why conservative savers use it as an alternative to renewing an FDR. Judge the specific fund's portfolio, not the label.
Second, your money does not sit with the asset manager — or on anyone's balance sheet. By BSEC regulation, every mutual fund's assets are ring-fenced with an independent custodian and overseen by an independent trustee, and can be invested only according to the fund's published mandate. A bank deposit, by contrast, becomes part of the bank's own book, to be lent out as the bank judges best. The fund manager makes investment decisions; it cannot touch the fund's assets for anything else.
Third, risk is a function of time. Day to day, markets wobble. Over 10–15 years, a diversified portfolio's outcomes smooth out dramatically — while the certainty of a fixed return that barely clears inflation, and is then taxed at your marginal rate, is really the certainty of standing still. There is also a quieter risk in fixed instruments: the risk of arriving at retirement with money that kept its number but lost its value.
The practical answer for most people is not either/or. It is a mix: guaranteed instruments for near-term needs, market-linked funds for long-term growth, sized to your own sleep-at-night threshold.
A Simple Rule of Thumb
If you remember one thing from this article, make it this: match the tool to the timeline.
Short horizon → fixed and liquid. Medium horizon → fixed or fixed-income funds. Long horizon → growth-oriented, diversified, professionally managed. And whatever you choose, start now — the most expensive option on this entire page is waiting.
Not sure where you fall? Try our free Investment Calculator to project your goals, or explore how Ekush's fixed-income, balanced, and growth funds map to each timeline. Our team is happy to walk you through it — no jargon, no pressure.
Frequently Asked Questions
Disclaimer: Investment in mutual funds is subject to market risk. Past performance does not guarantee future results. Interest and profit rates on FDR, DPS and Sanchayapatra are indicative, vary by institution and instrument, and change over time. This article is for educational purposes and is not personalized financial advice. Ekush Wealth Management Limited is licensed by the Bangladesh Securities and Exchange Commission (BSEC).