Why Stock Market is Better Bet than Fixed Deposit

There is a myth that common people can't make money in the stock market. Problem is, common people are too pessimistic to enter the stock market or they enter with too much optimism to beat the market which creates the actual problem. Pursuing the medium path with patience is the key to success and that always yields good return even if the person is not an expert in any kind of analysis in the stock market.

Sensex Vs Fixed Deposit Vs Inflation in Last Decade(Yearly % return)

Above chart explains the earlier premise. This chart has captured the data of the last 10 years return on Sensex, fixed deposit and how much inflation has eaten silently during the same time period. We can see inflation has eaten away almost all the profit accrued through fixed deposit. If you see carefully then during this phase sometimes inflation was higher than fixed deposit. What does this mean? It means people having fixed deposit during that period were losing their money in terms of purchasing power.

What’s extra? This calculation has not included the benefit due to dividend, stock bonus etc. In terms of tax, fixed deposit income is considered as regular income and attracts higher tax in comparison with stock market which is just capital gain.