What are the benefits of a conservative mutual fund over a CD?

It seems like mutual funds are being pushed aggressively right now. Most of my savings are in CDs at about 5%. I plan to pull a good bit out in about 2 years for a home remodeling project. My banker suggests moving them to a conservative mutual fund, but I am not sure how much greater the earning potential really is, especially considering the fees involved. Also, I'm concerned that mutual funds are not FDIC insured. Furthermore, I am not clear about how liquid my money would be in a mutual fund as compared to a 3- or 6-month CD.

Would I really benefit from moving into a mutual fund, or is my banker just trying to make more money off of my account?

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