Fixed Deposit in Bank

OMG, we never think on that Bulbul. We only think about the safer side but never compared with the inflation rate. While the Mutual Funds are non-taxable. What is you advice Bulbul?

True Pranab,
Compared with equity mutual funds, long term returns from which are tax free, FD interest is taxable at your current tax slab. The higher your income, the lower your FD return will be. So, i will suggest you to invest in Mutual Funds.

I am giving you the reason why?
If you are investing Rs. 1 lakhs in Bank as FD, your post tax returns after 20 years Rs. 3.83 lakhs. To beat inflation minimum amount required is Rs4.66 lakhs.

But if you are investing Rs. 1 lakh in Debt Mutual Fund, your post tax returns after 20 years will be Rs. 5.11 lakhs, more than the amount required to beat inflation.

Similarly, if you are investing Rs. 1 lakh in Equity Mutual Fund, your post tax returns after 20 years will be Rs. 13.74 lakhs

Thanks Bulbul,
Should I invest in equity or debt mutual fund?

According to me Equity mutual funds are recommended for long term investing (more than 5 years) and debt funds for shorter durations.

Thanks Bulbul. You had provided very useful information.

Madhav Jha