Nitin Ghai | AMFI Registered Mutual Fund Distributor | IRDAI General Insurance Certified
MutualFundVibe

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Most people see Fixed Deposits as “safe”.
They are safe in terms of value — but not always in terms of wealth.
And this difference usually comes out only with time.

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Let me explain this simply.

In an FD, tax is applicable every year, even if you don’t withdraw the money.
Interest gets added annually, TDS is deducted, and in some cases advance tax also comes into play.

So consider a ₹1 crore FD for 3 years at around 7%.
On paper, it looks reasonable.
But after tax, the real return often struggles to beat inflation of ~6%.

Matlab paisa account mein badhta dikhta hai,
par purchasing power quietly kam hoti rehti hai.

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Now look at certain relatively stable, non-equity mutual fund categories —
like equity savings funds, corporate bond funds, or long–short / medium-duration strategies.

Here, taxation is usually triggered only when you withdraw the amount for use.
Till then, compounding continues without annual tax outflow.

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This difference in tax timing — not higher returns —
is one of the most under-discussed aspects of long-term investing.

It’s not about FD vs mutual fund.
It’s about understanding:

• time horizon

• tax slab

• liquidity needs

• comfort with small ups & downs

Education first. Decisions later.
Final choice always remains with the investor.

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Disclaimer

This post is for educational awareness only. Examples and tax references are illustrative and may vary based on individual circumstances and prevailing tax laws. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully. The final investment decision always rests with the investor.

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