19 thoughts on “How are you losing Money by investing in Fixed Deposits?”

  1. B.N.Bhattacharya

    comparison between Bank FD and mutual fund is correct only when you know when buy and sell them.Other wise you will face problems,

    1. If we can put so much effort in earning money, we should put some effort to manage it too. If you invest in liquid/short term debt funds risk is very low and you gain on taxation if redeemed after 3 years.

  2. Thanks for all these eye opening facts about fd. But still I want to know more about debt fund.how it opens .and its benefits.

    1. The process to invest in Debt Fund is same as normal Mutual fund. You can read more about investing in Mutual fund here. Debt funds are more tax efficient especially for duration of more than 3 years.

  3. The inflation is not constant and presently it is expected to dip down , thus the above comparison may not hold good ,whereas the other market related options are very jittery. Please suggest the best investment option for the senior citizens

    1. As the inflation comes down so does the interest rates offered on bank fixed deposits, so you would not really make money in FDs. The best that can happen is very marginal returns over inflation and after taking tax in picture even that is difficult.

      For regular income – Senior Citizens’ Savings Scheme is a good option. Other than this you can invest in Debt Mutual Funds which is more tax efficient. But for long term you have to invest in equities directly or through mutual funds to beat inflation. So putting a part of portfolio which is going to be used after 10 years, its good idea to go with equities.

  4. Suresh @ Best Investment Plans

    Good article Amit. Investors generally tend to see the FD rates and does not compare what they are getting above inflation rate. Such comparison helps in realising how we are loosing money.

  5. I knew that FD is not the best of investment but didn’t realize I was loosing money. This is an eye opener for me.

        1. In most cases inflation is higher than fixed deposit returns after tax. So you would loose money irrespective of FD tenure.

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