Mutual Funds vs Crypto: What is the Right Investment for You?

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Crypto has been the talk of the town for quite some time now. According to TechSci Research report, the cryptocurrency market is forecasted to grow with a CAGR of 6.75% during 2025-29. Seeing its significant growth, many might be enticed to invest their money. But is it the right investment for you? Let’s find out. This blog will help you explore whether crypto suits your goals or if a safer option, like mutual funds, is a better fit. Read on to make an informed decision.

What is cryptocurrency?

Cryptocurrency is a digital currency that you can use to make payments. It is made, distributed and exchanged by people electronically across the world. It is not backed by financial authority or government, and the value of each cryptocurrency is based on demand among investors. Bitcoin, Ethereum, Tether and Solana are some widely known cryptocurrencies.

What are mutual funds?

Mutual funds pool money from several investors, this money is then put into equity and debt. There are fund managers who are responsible for analysing and trading securities of mutual fund schemes. They offer better money management, which is great for those who do not have the time or knowledge to take advantage of the market.

Key differences between cryptocurrencies and mutual funds

	Cryptocurrencies	Mutual Funds
Regulation	These are not recognised or regulated by any authority.	These are recognised by SEBI (Security and Exchange Board of India).
Risk	High risk and easily susceptible to fraud.	You can choose the risk you want to take. This can be done by choosing schemes suited to your preferences.
Returns	They are highly volatile, which is why there may be fluctuations in returns.	The returns are generated based on the different schemes chosen by the investor.
Investment mechanism	Investors are supposed to directly purchase crypto coins to make an investment.	A fund manager takes care of the investments on behalf of investors.
Liquidity	There is no legal tender, which is why it is difficult to liquidate. It involves selling on decentralised, third-party platforms.	They possess a relatively high level of liquidity. There are mutual funds wherein you can even withdraw their money even after one day. A certain fee, called the exit load, is charged if you want to withdraw funds before maturity. This only applies to open-ended mutual funds.
Minimum and maximum value	The values keep changing depending on the digital wallet.	You can opt for Systematic Investment Plans (SIPs) as low as ₹500. There is no maximum value.
Maturity	A person can invest in crypto for as long as it’s available and operational.	There is no specific date or tenure. You can choose to invest for short-, medium- or long-term periods. Also, you can opt out at any time.
Tax	Income from cryptocurrency is taxed at 30% (plus 4% cess) as per Section 115BBH. Furthermore, 1% TDS is applicable on transfers of crypto assets if the transactions exceed ₹50,000 (or ₹10,000 in certain cases) according to Section 194S.	There are distinct tax rates for different mutual funds. This depends on whether they are equity- or debt-based or hybrid.

What should you choose? Cryptocurrencies or mutual funds?

First, you must think about your financial goals. If you want to focus on long-term goals, you should ideally choose mutual funds. On the other hand, cryptocurrencies are suitable for short-term goals. The latter is ideal for people who want high-reward investments and can take higher risks. It also depends on your interest and knowledge. For cryptocurrencies, you do require a good understanding of the market. A proactive approach is needed to make sound investment decisions, which is not the case with mutual funds, as there are professional fund managers.

Conclusion

Whether you want to save or invest, Kotak811 Savings Accounts are an ideal place to keep your money safe. They allow you to grow your funds by earning interest over the years. From building a financial discipline to being a gateway to other investments, they will support your every need. So, explore the options at Kotak811 and apply for a reliable savings account online today.