Veteran market investor Shankar Sharma has reignited the long-running debate between equity investing and traditional bank fixed deposits after sharing a data-backed comparison of Nifty returns and FD performance over the past 12 years.
In a post on X, Sharma said he analysed the performance of the Nifty 50 Total Return Index, the Nifty in dollar terms and bank fixed deposits between May 15, 2014 and May 15, 2026, adjusting the figures for taxation and risk.
What stood out, according to Sharma, was not just the difference in returns, but the sharp contrast in risk-adjusted performance between equities and fixed deposits.
According to the figures shared by Sharma, the Nifty 50 Total Return Index generated a post-tax compounded annual growth rate (CAGR) of 9.38 percent over the 12-year period.
The Nifty measured in dollar terms delivered a lower post-tax CAGR of 5.11 percent, reflecting the impact of rupee depreciation over the years.
However, Sharma assumed annualised volatility of 15 percent for equities in both cases. After adjusting for risk and taxes, the Nifty TR Index produced a risk-adjusted return ratio of 0.617, while the dollar-adjusted Nifty return ratio fell further to 0.336.
Bank fixed deposits, though generating lower returns, appeared significantly stronger on a risk-adjusted basis in Sharma’s comparison.
According to the data, bank FDs delivered a post-tax CAGR of 4.93 percent during the same period. But because of their extremely low annualised volatility of just 0.25 percent, the tax- and risk-adjusted return ratio surged to 19.720.
“Bank Fixed Deposit delivered a post-tax CAGR of 4.93 percent with annualised volatility of just 0.25 percent. Its tax and risk-adjusted return stood at 19.720, while the return of capital remains guaranteed,” Sharma noted.
The post quickly triggered debate among investors because equities are widely promoted as the best long-term wealth creation avenue compared with traditional savings products such as fixed deposits.
Sharma’s analysis highlighted that headline returns alone may not present the complete picture unless adjusted for factors such as risk, taxation and currency depreciation.
The dollar-based Nifty comparison drew particular attention as it showed how rupee weakness erodes effective returns for global investors.
While Indian investors usually focus on returns in rupee terms, foreign investors assess performance after currency conversion, which can substantially reduce gains.
The discussion comes at a time when Indian equity markets are witnessing heightened volatility amid global macroeconomic uncertainty, geopolitical tensions and concerns over slowing earnings growth in some sectors.
At the same time, bank fixed deposits have become relatively more attractive over the past two years due to elevated interest rates, allowing conservative investors to earn stable post-tax returns without exposure to stock market swings.
Despite the intense discussion triggered online, Sharma refrained from drawing any direct investment conclusion from the comparison.
"No conclusions. Just data,” he said.