East of Eden by John Steinbeck - Free Essay Example

Sample details Pages: 4 Words: 1093 Downloads: 7 Date added: 2019/08/15 Category Literature Essay Level High school Tags: East of Eden Essay Did you like this example? What about a novel where the purest of heart is ruthlessly punished? What version of morality is Steinbeck advocating for? A clear extraction from all of his narrative decisions is the idea that goodness is only a virtue when it exists in tandem with bad, only when a man composed of equal measures of malice and benevolence wills himself to abide by the latter. When goodness manifests effortlessly, it is more of a vice than a virtue, as seen in our less rounded A- characters. Don’t waste time! Our writers will create an original "East of Eden by John Steinbeck" essay for you Create order With that in mind, for Steinbecks take on morally nuanced, irrepressibly good-willed men, we turn to Samuel Hamilton and Lee, two narratives not bound by namesake, running adjacent to the more archetypical Trask family. The two, through experience and wisdom of age, have developed the ability to accept in stride the paradoxical amalgamation of good and evil in themselves and actively find empowerment over their respective destinies. Samuel Hamilton, Steinbecks larger-than-life righteous man, is so rapidly aged from continuous familial tragedies and acting as the dutiful patriarch of a wholesome family that his unsatisfying, wrongful demise seems inappropriate. His son, Tom Hamilton, shoots himself in his farmhouse with his extended family miles away despite being a loving brother and a kind soul. This is contrasted with the implication that Cathy got what was coming to her, committing suicide by poison in the solitude of her office. The inconsistent degree of poetry justice Steinbeck dishes out stands to confuse rather than clarify. The rationalisation of that is as follows. Steinbecks good is defined as good entirely without conditions, not so much blind as it is selfless. The stories from the fictional Trasks make narrative sense because they are written to convey an unambiguous moral lesson, but the Hamiltons are real people and hence their stories irregular. If the autobiographically inclined narrative following a conventional framework- our heroes get their well-earned happy endings and our villains eternal damnation- the decision to do good becomes a selfish one and much less free, as a choice between happiness and misery scarcely qualifies a choice. The consequences of our choices outside of Eden do not necessarily coincide with our intentions, good or bad. Adams good is irrational, without proper motivation or justification, which explains why it eludes Cathy entirely, why she could not fathom Adams immunity to her manipulation. Straining the qualifier further, Steinbeck offers that goodness arising from a fear of hellfire or a desire for heaven does not qualify as true goodness. It may also serve as a final condemnation of Arons warped sense of entitlement, who wanted the story and he wanted it to come out his way. couldnt stand to know about his mother because thats not how he wanted the story to goand he wouldnt have any other story. So he tore up the world (Steinbeck 444). East of Eden treads the careful line between fact and fiction, vacillating from an ancestral biography from the perspective of Samuels grandson and an omniscient moralistic creator, specifically in-between the Trask and the Hamiltons. The Trasks lead a life dictated by mythical symbolism while the Hamiltons legacy seem more or less grounded in reality. A moment that illuminated this diversion is during Cathy Trasks childbirth. Cathy Trasks physical descriptions are blatantly villainous, first likened to a reptile with Her ears were very little, without lobes, and they pressed so close to her head that even with her hair combed up they made no silhouette (Steinbeck 58), and later morphs into the Sabbatic goat Satan, her feet small and round and stubby, with fat insteps almost like little hoofs. (59) Around the Hamilton, such outlandish character become comically antagonistic, borderline satirical, lashing out by biting Samuel Hamilton on the hand during childbirth, an injury that sent him into a feverish slumber, not alike the symptoms of a venomous snakebite. Fantastical characters like these not only leave disbelief not only unsuspended, but also actively enforced. Lee is, rather unambiguously, the mouthpiece by which Steinbeck underscores the storys theme. The moment he decides to is when he gives up his singular character motivation to open a bookshop is when he fully committed as a framing device, likewise when he was passed over from friendship with the somewhat truthful Hamiltons to the servitude of the completely fabricated Trasks. Hence his experience could be regarded as the same metafictional excessiveness as the Trask characters. His horrific birth in particular exemplifies the ugliness one has to suffer through to grapple with Timshel. Amidst the maudlin revelations and impassioned journey of each character, Lees story is a horrifically depersonalised, less delicate illustration of the ubiquitous truth. My father came to [my mother] on the pile of shale. She had not even eyes to see out of, but her mouth still moved and she gave him his instructions. My father clawed me out of the tattered meat of my mother with his fingernails (Steinbeck 276) Something so deeply personal accounted by Lee himself in such a clinical, cooly visceral way again enforces his role as a transcendent, objective overseer to the drama, even his own. The narrative fabricated has Lees mother brutally raped then left to bleed out after the construction workers discovered she had lied about her gender and subsequently hidden her pregnancy to get work. That much is fully sufficient to establish the primal evil in man, but then we are told that Lee was cared for and brought up by the entire camp, the same people who murdered his mother, hence the capacity for penance even in the irredeemable. As extreme of a conclusion that might be, it shows how sure Steinbeck is in his convictions that humans are equal parts good and bad, so resolute that he is willing to take the ridiculous yet inevitable conclusion against the evidence of common sensibilities. Despite all the pillage and misery, classifying Steinbecks world as bleak and dreadful would be a grave misnomer. East of Eden is a jeremiad, but an infectiously hopeful one at that. And though not subtly put, Steinbecks message is an important one. The title East of Eden alludes to the biblical passage where Cain went out from the presence of the Lord and dwelt in the land of Nod, east of Eden. (Genesis 4:16, New International Version), where he transformed human culture from innocence to craftiness, the society that sprung from him Godless and independent. To live far from his influence was a punishment in the Bible, but to Steinbeck, a world rid of supernatural control, adherent to the fickle whims of humanity, is the only legitimate one.

The Era Of The Gilded Age - 1153 Words

From 1865 to 1900, the American industry paved the way for an era like none that has been seen before. The country built and invented more supplies and materials than anyone had thought possible. Even though, this time in history seemed progressive on many fronts, it was known as the â€Å"Gilded Age†. The Gilded Age was a three decade time in America that involved an expanding economy and a useless government. The thought of going to an American city, getting a job, and getting paid was ideal to most outsiders. The problem was, once they arrived and found a job, it was not as wonderful as it seemed . It was called the Gilded Age because, from the outside, everything looked wonderful, but on the inside it was spoiled. During America’s†¦show more content†¦Along with other factors, the ghettos shined a bad light on immigrants because the ugly and unkempt house were a reflection of the immigrants living there. The city people were no longer accepting of the forei gners and nativism began. Nativism is protecting the interests of native-born people against the interests of immigrants. Most Americans were afraid of the immigrants and the power they had on the economy, so they started to attack the immigrants, both physically and socially. Many political cartoons were published supporting anti-immigration and violence was geared towards the newcomers (Appleby 310). There is no doubt the abundant numbers of immigrants created issues amongst the American people. Immigration was an issue that needed attention. In attempt to hinder the incoming population, the Chinese Exclusion Act started in 1882. The act prevented all people of Chinese origin to move to America. It also prevented any Chinese person already living in America to gain citizenship, if they had not already (310). The government also began to put regulations and restrictions on who could enter the U.S. In 1907 the Immigration Commission was established. This department only had to deal with immigration and immigration laws. They prevented unskilled immigrants and criminals from entering the U.S. Their job was also to deport any immigrants that had committed a crime (America and Immigration). The government understood the problems immigration was creating

Hamlet †Comment On Humanity Analysis Essay Example For Students

Hamlet – Comment On Humanity Analysis Essay The Elizabethan play The Tragedy of Hamlet Prince of Denmark is one of William Shakespeares most popular works. One of the possible reasons for this plays popularity is the way Shakespeare uses the character Hamlet to exemplify the complex workings of the human mind. The approach taken by Shakespeare in Hamlet has generated countless different interpretations of meaning, but it is through Hamlets struggle to confront his internal dilemma, deciding when to revenge his fathers death, that the reader becomes aware of one of the more common interpretations in Hamlet; the idea that Shakespeare is attempting to comment on the influence that ones state of mind can have on the decisions they make in life. As the play unfolds, Shakespeare uses the encounters that Hamlet must face to demonstrate the effect that ones perspective can have on the way the mind works. In his book Some Shakespeare Themes ; An Approach to Hamlet, L. C. Knight takes notice of Shakespeares use of these encounters to journey into the workings of the human mind when he writes:What we have in Hamlet.is the exploration and implicit criticism of a particular state of mind or consciousness.In Hamlet, Shakespeare uses a series of encounters to reveal the complex state of the human mind, made up of reason, emotion, and attitude towards the self, to allow the reader to make a judgment or form an opinion about fundamental aspects of human life. (192) Shakespeare sets the stage for Hamlets internal dilemma in Act 1, Scene 5 of Hamlet when the ghost of Hamlets father appears and calls upon Hamlet to revenge his foul and most unnatural murder (1.5.24). It is from this point forward that Hamlet must struggle with the dilemma of whether or not to kill Claudius, his uncle, and if so when to actually do it. As the play progresses, Hamlet does not seek his revenge when the opportunity presents itself, and it is the reasoning that Hamlet uses to justify his delay that becomes paramount to the readers underezding of the effect that Hamlets mental perspective has on his situation.In order to fully underezd how Hamlets perspective plays an important role in this play, the reader must attempt to answer the fundamental question: Why does Hamlet procrastinate in taking revenge on Claudius? Although the answer to this question is at best somewhat complicated, Mark W. Scott attempts to offer some possible explanations for Hamlets delay in his book, Shakespeare for Students: Critics who find the cause of Hamlets delay in his internal meditations typically view the prince as a man of great moral integrity who is forced to commit an act which goes against his deepest principles. On numerous occasions, the prince tries to make sense of his moral dilemma through personal meditations, which Shakespear e presents as soliloquies. Another perspective of Hamlets internal struggle suggests that the prince has become so disenchanted with life since his fathers death that he has neither the desire nor the will to exact revenge. (74)Mr. Scott points out morality and disenchantment, both of which belong solely to an individuals own conscious, as two potential causes of Hamlets procrastination, andtherefore he offers support to the idea that Shakespeare is placing important emphasis on the role of individual perspective in this play. The importance that Mr. Scotts comment places on Hamlets use of personal meditations to make sense of his moral dilemma (74), also helps to support L.C. Knights contention that Shakespeare is attempting to use these dilemmas to illustrate the inner workings of the human mind.In Hamlet, Shakespeare gives the reader an opportunity to evaluate the way the title character handles a very complicated dilemma and the problems that are generated because of it. .ud78f058c902b6f489a2e101b36f5f34b , .ud78f058c902b6f489a2e101b36f5f34b .postImageUrl , .ud78f058c902b6f489a2e101b36f5f34b .centered-text-area { min-height: 80px; position: relative; } .ud78f058c902b6f489a2e101b36f5f34b , .ud78f058c902b6f489a2e101b36f5f34b:hover , .ud78f058c902b6f489a2e101b36f5f34b:visited , .ud78f058c902b6f489a2e101b36f5f34b:active { border:0!important; } .ud78f058c902b6f489a2e101b36f5f34b .clearfix:after { content: ""; display: table; clear: both; } .ud78f058c902b6f489a2e101b36f5f34b { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .ud78f058c902b6f489a2e101b36f5f34b:active , .ud78f058c902b6f489a2e101b36f5f34b:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .ud78f058c902b6f489a2e101b36f5f34b .centered-text-area { width: 100%; position: relative ; } .ud78f058c902b6f489a2e101b36f5f34b .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .ud78f058c902b6f489a2e101b36f5f34b .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .ud78f058c902b6f489a2e101b36f5f34b .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .ud78f058c902b6f489a2e101b36f5f34b:hover .ctaButton { background-color: #34495E!important; } .ud78f058c902b6f489a2e101b36f5f34b .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .ud78f058c902b6f489a2e101b36f5f34b .ud78f058c902b6f489a2e101b36f5f34b-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .ud78f058c902b6f489a2e101b36f5f34b:after { content: ""; display: block; clear: both; } READ: Mental Health and Depression Essay These problems that face Hamlet are perhaps best viewed as overstatements of the very types of problems that all people must face as they live their lives each day. The magnitude of these everyday problems are almost always a matter of individual perspective. Each person will perceive a given situation based on his own state of mind. The one, perhaps universal, dilemma that faces all of mankind is theproblem of identity. As Victor L. Cahn

Comparative Study of Mutual Funds and Bank Deposits free essay sample

Comparison between mutual funds and fixed deposits is a long debate, especially when it comes to a comparison between fixed deposits and debt mutual funds. Even a few years ago, any conservative and risk averse investor would think investing in bank fixed deposits is better than mutual funds (debt or otherwise). Nevertheless, the market scenario has changed a lot in the recent years, and many a mutual funds family has come up with interest debt mutual fund schemes with guaranteed returns alongside capital appreciations. This makes the comparison between debt mutual funds versus fixed deposits more complex, and even the most risk averse investor (count my father! ) is led to think twice. That being said, whether you should invest in bank fixed deposits or debt mutual funds is no more a simple question as it used to be five-six years back, and needs a detailed examination and explanation. And, we at Mutual Funds Manager are here again to help you with a neutral comparison between fixed deposits and mutual funds. Arent we great? 🙂 So, mutual funds and fixed deposits, which is better? While only you can finally decide whether mutual funds or fixed deposit where to invest — depending on your risk taking abilities, return expectations, and investment horizons — let us try to analyse some key factors one by one and chalk out a comparison between bank FD and mutual funds. 1. Return on investments vary for mutual funds, but not bank deposits Needless to repeat, bank deposits offer you a fixed percentage of return, as would be agreed upon by the investor and the bank at the time of the investment. For example, if you put 50 thousand rupees in FD for 5 years and the agreed interest rate is 8% per annum, you will continue to enjoy the same interest rate throughout the tenure. On the other hand, debt mutual funds have no assured rate, and the return on investment for debt mutual funds depend completely on the market and the performance of the fund. Fluctuations in the money market impacts the NAV of the fund, thereby altering returns. Thus, a great advantage of bank fixed deposits is that, you will continue to earn the same interest rates even if the market goes down. Nevertheless, this very advantage of fixed deposits over mutual funds can actually turn out to be their great disadvantage. If the market goes up mutual funds will give more returns accordingly, but your FD will continue to yield in the same old rate. So, the actual question becomes, whether there is any chance of the Indian market going up in near future, especially following the recent recession? Yes, there is. At least, we think so. Market researches and predictions indicate that the Indian money market will go up in 2013, may get stagnant for a while in 2014, then taking another upward curve. Mutual Funds Managers Recommendation: For longer tenures, mutual funds are as good as fixed deposits, if not better. 2. Comparison between mutual funds fixed deposits: Inflation adjustment Inflation adjustment is a very important point while comparing mutual funds and fixed deposits. FDs dont come with inflation adjustment guarantees, and if the interest rate is lower than the inflation rate, you actually end up losing the value of your money. In the FY 2011-12, the inflation rate in India was 7%, while the interest rate for around 1 year tenure was something around 7% as well [6. % for ICICI and HDFC banks, 6. 75% for Citibank and HSBC, 7. 10% for Axis and Yes Bank and so on. Higher rates are there, but for lump-sum investments like 1 crore. ]. Thus, if you have invested in bank FDs for the last FY, you either failed to beat inflation or ended up with minimal inflation adjusted positive returns. On the other hand, at least half a dozen mutual funds yielded returns greater than 8% ( some as high as 12-14%), thereby giving you handsome inflation adjusted returns. Usually, mutual funds outrun inflation and always give positive, real returns. Mutual Funds Managers Recommendation: Unless your fixed deposits give high interest rates like 9-9. 5%, mutual funds are better. 3. Mutual funds and fixed deposits: Capital appreciation When it come to capital appreciation, mutual funds are better than fixed deposits, because of the equity investment. In longer time periods, market changes result in increasing interest rates. And, your mutual funds manager is there with all the expertise and professionalism to ensure a better capital appreciation. Mutual Funds Managers Recommendation: Debt funds. No second thought. 4. Mutual funds or fixed deposits, which one is more liquid? In terms of liquidity, these days both fixed deposits and mutual funds are almost same. Fixed deposits are actually meant for long lock in periods, but most banks allow premature withdrawals with a nominal penalty (usually 1%). The interest rate calculation for bank fixed deposit withdrawals is done on how long the money was parked. Mutual funds are equally liquid; you can take out any number of units within a couple of days. The return for premature withdrawal of mutual funds units is done on the prevalent NAV of the fund. Usually, there is an exit load of 1% for premature withdrawals before 1 year. Mutual Funds Managers Recommendation: Almost equal. For premature withdrawals beyond 1 year, mutual funds are slightly better because of nil exit load. 5. Risk factor of mutual funds and fixed deposits The only reason why most investors prefer fixed deposits to debt mutual funds is the assured return of the capital. On the other hands, returns from investments in mutual funds are subject to the volatility of the market, and may result in low or even negative returns. An investor should be wise enough to judge the quality of the investment instrument and thereby minimizing risk factors. Mutual Funds Managers Recommendation: For an extremely risk averse investor, fixed deposits are the only risk-free investment options. However, less risk means less return. Now, you decide! 6. Cost of investments in mutual funds and bank fixed deposits Investing in bank fixed deposits costs nothing. On the other hand, there is a minimum charge for mutual funds investments management and fund distribution, borne by the investor irrespective of returns. In other words, no matter whether your return on mutual funds investments is positive or negative, you have to bear an expense as the fees of fund management. Sometimes, entry loads are there as well, but quite rarely. Mutual Funds Managers Recommendation: Fixed deposits, since they have no entry load or management charges. 7. Tax benefits of debt mutual funds and bank fixed deposits Fixed deposits interests are considered incomes and come under income taxes (if you are taxable, of course). Moreover, there is a TDS (Tax Deducted at Source) at the rate of 10. 3% p. a. if your total cumulative interest on all FD is more than Rs. 10,000 in any financial year. Similarly, short term capital gains of debt funds are considered income and are accordingly taxable. For long term capital gains, tax is 10% without indexation or 20% with indexation. However, dividends received on debt mutual funds are tax free. Mutual Funds Managers Recommendation: Mutual funds are better than fixed deposits in terms of tax benefits, unless the latter offers any special scheme that is exempted from IT. So, should you invest in mutual funds or fixed deposits? We repeat, this decision is yours. If you are young and come from the average middle and upper middle class (at least), you can supposedly take more risk and should go for investing in mutual funds. Mutual Fund:Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. In this your amount is invested in different companies according to percentage ratio. Below are our best reading on mutual fund: * What Mutual Fund do with investor’s Money * Concept of Mutual Funds * Benefits of Mutual Fund * What is Net Asset Value (NAV) * What Is Mutual Fund? * Post Office FD Vs Mutual Fund * Mutual Funds vs portfolio management When you deposit money with the bank, the bank promises to pay you a certain rate of interest for the period you specify. On the date of maturity, the bank is supposed to return the principal amount and interest to you. Whereas, in a mutual fund, the money you invest, is in turn invested by the manager, on your behalf, as per the investment strategy specified for the scheme. The profit, if any, less expenses of the manager, is reflected in the NAV or distributed as income. Likewise, loss, if any, with the expenses, is to be borne by you. Bank fixed deposits are more stringently regulated than are companies. They even operate under stricter requirements regarding Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) mandated by RBI. While the above are causes for comfort, bank deposits too are subject to default risk. However, given the political and economic impact of bank defaults, the Government as well as Reserve Bank of India (RBI) try to ensure that banks do not fail. Further, bank deposits up to Rs 1 lakh are protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC), so long as the bank has paid the required insurance premium of 5 paise per annum for every Rs 100 of deposits. The monetary ceiling of Rs 1 lakh is for all the deposits in all the branches of a bank, held by the depositor in the same capacity and right. Please Note: Bank fixed deposit is completely secure and gives a fixed return – the interest earned is taxable. Mutual Fund debt instruments issued by corporates, banks, rbi. They are not completely secure (very little risk) the risk is mostly to returns since the return is not absolutely fixed, however returns are taxfree in the hands of the investor. Invest for long term in mutual fund SIP for more profit. What is meant by long term investment? Does it mean that buying at any price and wait for 3-4 years? Think twice. Give importance to Value; Give importance to Growth. Give importance to Price; these values are much more important statistics than Investment duration. Quote of the day: â€Å"A long term investment is like marriage; medium term investing is like an extra-marital affair and intra-day trading is like that risky one-night stand. † Best Reading. After several years, investors are finding that fixed deposit rates are climbing to respectable levels. While 90-day bank deposits are offering around 5 per cent returns, one-year deposits are yielding 7-8 per cent. As far as mutual funds are concerned, though the future of income funds, which invest in medium-and long-term debt papers, seems to be uncertain, short-term debt funds are giving returns in excess of 6. 5 per cent. On a post-tax basis, debt schemes fixed-maturity plans in particular seem to be the best option for investors looking for steady returns. Funds beat banks Even as banks are luring investors with higher fixed-deposit rates, mutual funds seem to be steeling a march over them with FMPs. The total assets under management under these schemes have nearly doubled this year. At the end of July, these schemes had a combined corpus of Rs 28,571 crore (Rs 285. 71 billion). According to industry sources, in August alone, 14 FMPs have so far been launched with varying maturity and the total collection is expected to be at least around Rs 4,000 crore (Rs 40 billion). The AMCs that have launched FMPs this month include Reliance, ABN AMRO, Principal, HSBC, UTI, HDFC, LIC, Prudential ICICI, JM Financial, DBS Chola and SBI. Essentially targeted at corporate and high networth investors, FMPs combine the tax efficiency of mutual funds with the safety of fixed deposits. The current rates on FMPs are as attractive as bank deposit rates and, thanks to the lower taxes on mutual funds, the post-tax returns on FMPs are better. Currently, 90-day FMPs are offering around 6. 85-7. 10 per cent, while one-year FMPs are generating around 8. 0 per cent pre-tax returns. HDFC Mutuals 26-month FMP yields 8. 45 per cent for corporate investors and 8. 10 per cent for retail investors. These schemes usually come with a quarterly or annual term, and the shorter-term schemes are a huge hit with corporate investors, who usually seek to lower the tax incidence. Mutual funds charge as low as 5-10 basis points as expenses, which is abysmally low. Even for retail investors in the top income tax bracket, these schemes make sense. The tax edge As dividends of mutual funds attract only a dividend distribution tax of 22. 4 per cent for corporates and 14. 03 per cent for individual investors vis-? -vis interest on deposits and corporate bonds, charged at the marginal income tax rate, mutual funds give better post-tax returns. High networth individuals have a lot of appetite for these schemes as they generate significantly higher post-tax returns, says Sameer Kamdar, national head mutual funds, Mata Securities. Furthermore, income from mutual fund units held for more than a year is deemed to be capital gains and, hence, qualifies for indexation benefit. This reduces the tax incidence even more. Thus, while a 8. 1 per cent, one-year FMP would yield a post-tax return of 7. 2 per cent for an individual investor in the top income tax bracket (if he opts for the growth plan), a bank fixed-deposit offering a similar rate would yield only 5. 37 per cent net of tax. Even if you opt for the dividend plan, which is less tax-efficient compared to the growth plan, for more than one-year time horizon, you would come up with a post-tax return of 6. 96 per cent. The post-tax returns indicated above are based an indexation rate of 4. per cent. For the uninitiated, indexation is a method wherein returns are deflated to the extent of inflation. The tax is calculated only on the inflation index-adjusted returns. The idea is that tax on long-term capital gains must be charged only on the real returns earned by an investor. The inflation index is published by the income-tax department every year. Similarly, 90-day FMPs, which offer 7 per cent, would yie ld a post-tax return of 6. 01 per cent. Currently, JM Mutual and LIC are offering rates upwards of 7 per cent. The risk factor Though FMPs are projecting fairly high yields, these are only indicative returns. They produce predictable returns over the desired timeframe since the maturity of the portfolio matches the tenure of fund schemes. Unlike other schemes that suffer from volatility and, hence, risk of erosion in asset value, an FMP structured as closed-end funds carries no interest rate risk. Whether yields rise or fall, the asset value of these schemes is protected as deposits/ bonds are held to maturity. Still, they do not guarantee returns as bank deposits where the interest is assured do. Though FMPs have delivered the returns they have indicated so far, there could be a risk of asset-liability mismatch, and the investor may not finally get exactly the indicated yield. Says Dhirendra Kumar, chief executive officer of Value Research, a Delhi-based mutual fund tracking firm, Since there is no guarantee on the returns that funds give, there is a risk that investors may or may not eventually get the returns indicated even in case of FMPs, which are otherwise quite predictable. Besides, if you lock in funds in an FMP you dont have the option of liquidating it prematurely. But in case of bank deposits, you can withdraw your money without any penalty. However, the interest rate you earn on the deposit would be based on the period the money is invested for. For instance, if you break a one-year deposit after three months, you would be entitled to the interest rate applicable for the three-month deposit and not the one-year rate. In fact, since bank deposits can be withdrawn without any penalty, it is an ideal time for investors to close their old deposit accounts yielding lower returns and renew them at the prevailing rates. Other debt funds With uncertainty on interest rates receding, debt markets have rallied over the past one month. The 10-year benchmark yield has declined from 8. 5 per cent in mid-July to 7. 91 per cent now, and this has propped up the returns on debt fund schemes. Most categories of debt funds have delivered returns in excess of 6 per cent. Particularly, medium-term gilt and debt funds have generated over 10 per cent returns. Should you then begin to relook at income funds? May be, not yet. Fund managers warn that this kind of returns may not be sustainable. On the contrary, the debt market rally looks overdone and the market may be in for some correction. And if that happens, income funds may be back to square one. Moreover, the risk-return factor, today, is strongly in favour of short-term funds. The return differential between medium-term and short-term debt funds is quite narrow, and the choice must be obvious given that short-term funds offer far greater stability and slightly lower returns, says Kumar. Over the past one-month, short-term funds have seen a surge in returns too. This category has given an average return of 7. 2 per cent, which again compares favourably with bank deposits on a tax-adjusted basis. Comparative Study of Mutual Funds and Bank Deposits free essay sample Compare which is better! Comparison between mutual funds and fixed deposits is a long debate, especially when it comes to a comparison between fixed deposits and debt mutual funds. Even a few years ago, any conservative and risk averse investor would think investing in bank fixed deposits is better than mutual funds (debt or otherwise). Nevertheless, the market scenario has changed a lot in the recent years, and many a mutual funds family has come up with interest debt mutual fund schemes with guaranteed returns alongside capital appreciations. This makes the comparison between debt mutual funds versus fixed deposits more complex, and even the most risk averse investor (count my father! ) is led to think twice. That being said, whether you should invest in bank fixed deposits or debt mutual funds is no more a simple question as it used to be five-six years back, and needs a detailed examination and explanation. And, we at Mutual Funds Manager are here again to help you with a neutral comparison between fixed deposits and mutual funds. Arent we great? 🙂 So, mutual funds and fixed deposits, which is better? While only you can finally decide whether mutual funds or fixed deposit where to invest — depending on your risk taking abilities, return expectations, and investment horizons — let us try to analyse some key factors one by one and chalk out a comparison between bank FD and mutual funds. 1. Return on investments vary for mutual funds, but not bank deposits Needless to repeat, bank deposits offer you a fixed percentage of return, as would be agreed upon by the investor and the bank at the time of the investment. For example, if you put 50 thousand rupees in FD for 5 years and the agreed interest rate is 8% per annum, you will continue to enjoy the same interest rate throughout the tenure. On the other hand, debt mutual funds have no assured rate, and the return on investment for debt mutual funds depend completely on the market and the performance of the fund. Fluctuations in the money market impacts the NAV of the fund, thereby altering returns. Thus, a great advantage of bank fixed deposits is that, you will continue to earn the same interest rates even if the market goes down. Nevertheless, this very advantage of fixed deposits over mutual funds can actually turn out to be their great disadvantage. If the market goes up mutual funds will give more returns accordingly, but your FD will continue to yield in the same old rate. So, the actual question becomes, whether there is any chance of the Indian market going up in near future, especially following the recent recession? Yes, there is. At least, we think so. Market researches and predictions indicate that the Indian money market will go up in 2013, may get stagnant for a while in 2014, then taking another upward curve. Mutual Funds Managers Recommendation: For longer tenures, mutual funds are as good as fixed deposits, if not better. 2. Comparison between mutual funds fixed deposits: Inflation adjustment Inflation adjustment is a very important point while comparing mutual funds and fixed deposits. FDs dont come with inflation adjustment guarantees, and if the interest rate is lower than the inflation rate, you actually end up losing the value of your money. In the FY 2011-12, the inflation rate in India was 7%, while the interest rate for around 1 year tenure was something around 7% as well [6. % for ICICI and HDFC banks, 6. 75% for Citibank and HSBC, 7. 10% for Axis and Yes Bank and so on. Higher rates are there, but for lump-sum investments like 1 crore. ]. Thus, if you have invested in bank FDs for the last FY, you either failed to beat inflation or ended up with minimal inflation adjusted positive returns. On the other hand, at least half a dozen mutual funds yielded returns greater than 8% (some as high as 12-14%), thereby giving you handsome inflation adjusted returns. Usually, mutual funds outrun inflation and always give positive, real returns. Mutual Funds Managers Recommendation: Unless your fixed deposits give high interest rates like 9-9. 5%, mutual funds are better. 3. Mutual funds and fixed deposits: Capital appreciation When it come to capital appreciation, mutual funds are better than fixed deposits, because of the equity investment. In longer time periods, market changes result in increasing interest rates. And, your mutual funds manager is there with all the expertise and professionalism to ensure a better capital appreciation. Mutual Funds Managers Recommendation: Debt funds. No second thought. 4. Mutual funds or fixed deposits, which one is more liquid? In terms of liquidity, these days both fixed deposits and mutual funds are almost same. Fixed deposits are actually meant for long lock in periods, but most banks allow premature withdrawals with a nominal penalty (usually 1%). The interest rate calculation for bank fixed deposit withdrawals is done on how long the money was parked. Mutual funds are equally liquid; you can take out any number of units within a couple of days. The return for premature withdrawal of mutual funds units is done on the prevalent NAV of the fund. Usually, there is an exit load of 1% for premature withdrawals before 1 year. Mutual Funds Managers Recommendation: Almost equal. For premature withdrawals beyond 1 year, mutual funds are slightly better because of nil exit load. 5. Risk factor of mutual funds and fixed deposits The only reason why most investors prefer fixed deposits to debt mutual funds is the assured return of the capital. On the other hands, returns from investments in mutual funds are subject to the volatility of the market, and may result in low or even negative returns. An investor should be wise enough to judge the quality of the investment instrument and thereby minimizing risk factors. Mutual Funds Managers Recommendation: For an extremely risk averse investor, fixed deposits are the only risk-free investment options. However, less risk means less return. Now, you decide! 6. Cost of investments in mutual funds and bank fixed deposits Investing in bank fixed deposits costs nothing. On the other hand, there is a minimum charge for mutual funds investments management and fund distribution, borne by the investor irrespective of returns. In other words, no matter whether your return on mutual funds investments is positive or negative, you have to bear an expense as the fees of fund management. Sometimes, entry loads are there as well, but quite rarely. Mutual Funds Managers Recommendation: Fixed deposits, since they have no entry load or management charges. 7. Tax benefits of debt mutual funds and bank fixed deposits Fixed deposits interests are considered incomes and come under income taxes (if you are taxable, of course). Moreover, there is a TDS (Tax Deducted at Source) at the rate of 10. 3% p. a. if your total cumulative interest on all FD is more than Rs. 10,000 in any financial year. Similarly, short term capital gains of debt funds are considered income and are accordingly taxable. For long term capital gains, tax is 10% without indexation or 20% with indexation. However, dividends received on debt mutual funds are tax free. Mutual Funds Managers Recommendation: Mutual funds are better than fixed deposits in terms of tax benefits, unless the latter offers any special scheme that is exempted from IT. So, should you invest in mutual funds or fixed deposits? We repeat, this decision is yours. If you are young and come from the average middle and upper middle class (at least), you can supposedly take more risk and should go for investing in mutual funds.