Is your Fixed Deposit the best?
Fixed Deposits (‘FD’), as a saving habit has been ingrained into our blood. It’s for our good, that instead of spending here and there, we put some money into FDs especially in the world where it is more likely to get carried away through jazzy advertisements of 50% and 30% off.
However, a simple calculation shows how much money one could accumulate in savings through FD:
Assuming a person is able to keep aside Rs. 240,000 p.a. i.e. Rs. 20,000 p.m. Sure, it is great, and if you invest the same amount into Recurring Deposits, you are likely to get
If Rs. 1 crore is great in 20 years, what would you feel about the following:
Source: Calculation is based on the NAV as of 11th September 2016 and the above is the actual data for past 20 years.
In all of the above cases, your wealth have grown to become 3 times to 8 times more than what we would have got under Recurring Deposits.
AVOID NOISE, FOCUS ON PROOF
Now, if we talk about Fixed Deposit of Rs. 10,00,000 made on 1.09.2006, and if the same amount in mutual fund, results are eye-opener:
So, choice is in our hands! On one-side we can believe in India and its growth potential, on other hand, we can stay with our pace to continue hassle.
From Wealth to Joy, We Bridge the Gap
With asset allocation, we help people to safe guard themselves against contingencies and create Wealth. Wealth Creation is a Boring but Serious Business.
For more information about bridging the gap or to validate your existing investment, author is available to guide you or help you. Author is a Chartered Accountant and has prior experience with MNCs such as PwC and ACC.
Author: Tejas Lakhani, Research Head, Fincare Services