For retired people who usually invest in Bank deposits like FD,RD and SB. The main reason cited is liquidity in case of Savings Bank account, protection of principal in case of Fixed Deposit and higher interest return in case of Recurring Deposit. however the need to take note of inflation in the calculation of actual return in the above investments assumes importance, since the concept of purchasing power comes into play. because of inflation increasing year on year, the purchasing power of a given unit of currency decreases year on year.
In case of Debt ETFs and Debt Mutual funds, there is liquidity in some schemes offerd by some mutual funds. if a investor wants to use the funds for personal use, what is the assurance that at any given time in the market there would be a buyer for the units being sold midway. minimum number of days required by AMC to credit the sold funds to the investors account probably acts as a pain point. Becasue there is a exit load in ultra short term debt funds.
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