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Confused Whether To Invest In Stocks Or Bank FD For Long Term? – Compare Historical Returns To Choose The Best

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Frequency of introduction of new investment plans and investors is taking financial market to a new level. Due to a large number of investment products with different specifications, choosing one which can give health returns to the investor is becoming a challenge. To face this challenge now investors have started taking help from financial advisors. Financial experts or advisors are one who keep there close eye on the market and guide investors (where to invest and how much to invest ) in the right direction for making investment.

As everyone of us can not afford to have a financial advisor, so using the data published in times of India, here we have showcased a fact which will help you to choose your next investment destination. According to the details Fixed Deposits have generated more returns than stocks since 1992. Although most of you find this a little contradicting from the one we know, that investment in risky funds like equity generates better returns than any other investment option. But here we have details to show how the trend of returns been for Fixed Deposits and Sensex since last 20 years.

sensex vs FD

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YEAR

FD Rate Of Interest

Sensex Return

1991 – 92 12.00% 258
1992 – 93 11.00% (-)48.03
1993 – 94 10.00% 63.49
1994 – 95 11.00% (-)13.75
1995 – 96 12.00% 1.51
1996 – 97 11.00% – 12.00% (-)1.43
1997 – 98 10.50% – 11.00% 9.36
1998 – 99 09.00% – 11.00% (-)5.78
1999 – 00 08.50% – 09.50% 35.67
2000 – 01 08.50% – 09.50% (-)28.67
2001 – 02 07.50% – 08.50% (-)2.72
2002 – 03 04.25% – 06.00% (-)12.9
2003 – 04 04.00% – 05.25% 81.46
2004 – 05 05.25% – 05.50% 13.1
2005 – 06 06.00% – 06.50% 70.78
2006 – 07 07.50% – 09.00% 70.78
2007 – 08 08.25% – 08.75% 25.6
2008 – 09 08.00% – 08.75% (-)37.87
2009 – 10 06.00% – 07.00% 77.01
2010 – 11 08.25% – 09.00% 9.91

The data given above helps us calculate the how amount invested under Sensex or FD has grown over the past 20 years. In case of Sensex, which was 4285 in the year 1992 and 17404 in the year 2012. Amount invested under stock market earned an annualized return @7.26%. However, if the equal amount of funds (Rs 4285) was invested in Fixed Deposit,the annualized return over 20 years comes out to be @8.77% and it would grown to Rs 23030 by 2012.

Year

Fund

FD (8.77%)

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Sensex (7.26%)

1992 Invested 4285 4285
2012 On Maturity 23030 17404

From Above table you can simply conclude, how earning grown in last twenty years in both Bank Fixed deposits and Sensex. Here if you go for a Fixed deposit from more than 5 year than your rate of interest will be even higher on your investments. Whereas returns from investment in high-risk equities in long term equity turn out to be lower than safe bank FD investment.

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