Is it better to do covered calls with futures or underlying ETFs for Nifty & BankNifty?

Hi @Ishita Shrivastava17, 

If you're going for a covered call strategy, I would suggest you go for ETFs such as Niftybees (Incase of Nifty) and Bankbees (Incase of BankNifty) for the following reasons:

1. Buying ETFs will be a valuable addition to your portfolio and a long-term prospect.
2. You can pledge the same in Fyers for margin benefit and form the strategy of Covered Call (As you desire) by selling the call option using such margin. 
3. This way, you can trade without having to bring in any additional cash margin and attain the course of being a successful trader. Also, you can enjoy the returns generated from the ETFs as a prospective long-term investor.

Hope this clarifies!

If you want higher returns and you're comfortable with the risk that comes with it, then you can attempt it with futures. If you're the kind that likes to play safe, stick to ETFs. One big downturn can lead to big losses which your call option premium will not be able to cover.