A time deposit is a bank deposit, which has a guaranteed interest rate over a specific period of time. Offered by Banks.
A mutual fund pools money from different investors and invests it in various securities such as bonds and stocks. Its returns come from the appreciation of the fund's underlying investments. Offered by Asset management companies.
In Time Deposits i.e. Fixed Deposits the interest rates on time deposits are guaranteed. However, these usually provide modest returns. Returns are fixed and automatic, but modest.
In Mutual Funds, the returns are not guaranteed. Fund values may fluctuate depending on market conditions. But, based on the past performance; mutual funds have performed better than time deposits. This is why mutual funds should be help long-term.
When it comes to time deposits, the higher the amount and the longer the terms of placement, the higher the interest rate. However, in mutual funds, the returns depend on the type of fund and investment period. Typically, the higher the risk and the longer you stay invested in the mutual funds, the higher the potential returns.
When it comes to time deposits, there are penalty fees imposed for early withdrawal. In mutual funds, you may incur withdrawal charges depending on the sales load structure you chose when you invested in the mutual funds.
When it comes to taxes, both the time deposits and mutual funds are taxable. The regulations vary from country to country.