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Fixed-Income Fund: Alternative to Shanchayapatra (National Savings Certificate)

By Ashikur Rahman Tusar

Software Developer

EDGE AMC Limited

Posted on: 20 Dec, 2023

Last Updated: 11 August, 2026

Lured by attractive returns, Rahman decided to invest his savings in Sanchayapatra (a high-yield national savings certificate). He was looking forward to encashing a large return after three or five years, depending on the type of Sanchayapatra.

However, one day, Rahman had an emergency and needed to encash some of his Sanchayapatras long before they matured. As a result, he realized a meager return compared to the high return he would’ve gotten at the maturity of his Sanchayapatras.

Emergencies like this could happen to any of us. But there’s a great way to get decent returns in addition to more flexibility. Fixed-income funds—which provide decent returns while simultaneously providing you the flexibility to withdraw funds at any time with accrued interest income without having to discontinue your total investment—are a great liquid alternative to Sanchayapatra.

A More Liquid Alternative to Sanchayapatra: Fixed-Income Fund

A fixed-income fund invests mostly in assets with minimal risk, such as government Treasury bills and bonds and other stable income-generating assets.

When you put your money in a fixed-income fund, you accumulate interest income on top of your savings every week since the fund is concentrated in government Treasury bills and bonds that make guaranteed payments. With profits from such stable assets, fixed-income funds can deliver an annual return of 6–8% on average. The potential returns become even more attractive when interest rates are rising, like today.

On top of similar high safety due to the fund’s portfolio being concentrated in government-guaranteed Treasury bills and bonds, investments in mutual funds, including fixed-income funds, also enjoy tax rebate benefits of up to BDT750,000 (maximum elligible investment of BDT 75 lakhs). In contrast, investments of only up to BDT500,000 in Sanchayapatra is elligible, allowing a maximum tax rebate of BDT50,000. Moreover, a fixed-income fund's high liquidity, which allows you to withdraw funds with accrued interest income at any time, differentiates it from Sanchayapatra as a more flexible investment option offering decent returns.

Rahman, in our example, not only earns decent returns that are shielded from tax through a fixed-income fund, but he is also able to withdraw his savings with accumulated interest income at any time. In summary, Rahman enjoys steady and decent returns and high liquidity from a fixed-income fund.

You may take a look at our High-Quality Income Fund if you’re interested in investing in fixed-income funds.

To learn more about mutual funds, you may read our guide on mutual fund investing.