Why you should not invest in Fixed deposits for long term ?

This video talks about why an investor should avoid investing in fixed deposits for a longer period of time. Most of the investors mainly invest in fixed deposits because we are conditioned to think about Fixed Deposits (FD) as the first choice of investments, mainly for 2 reasons 1. Because they are Safe 2. The returns are predictible 3. Trust with the banks However the biggest problems with fixed deposits are that Problem #1 - Returns from Fixed Deposits does not beat inflation The biggest problem with fixed deposits is that the returns from FD does not beat inflation and finally our purchasing power reduces. Problem #2 - Returns are Taxable every year Another issue is that FD returns are not tax optimized and hence we pay a lot of tax provided one is in high tax bracket (30%) . What are the alternatives? Alternatives to Fixed deposits are Debt mutual funds which are safe enough like Fixed deposits with superior returns and better taxation Or one can think about Equity mutual funds which has high level of volatility but better returns from a long term perspective. Overall, One should avoid fixed deposits unless they want to park their money for a short period like 6 months or 1 yr. For details, watch the video Visit our website : www.jagoinvestor.com