Is Fixed Deposit investment better than the Stock Market?
A genuine question rises in our mind that we have to invest through FD (Fixed Deposit) or we should enter into the stock market. Actually, people want to earn a high return on their investment as soon as possible. But they forget the Risk and Reward ratio during investing in Stock Market. This answer will vary for different people because the answer will be given on the basis of the Risk-taking capacity of the person. As we know everyone has a different risk-taking capacity which depends on their financial background. For example, Some people are ready to take a risk of Rs 10 lakh but another one has can take a risk of Rs 1 lakh only.
Fixed Deposit-Investment
Now come to a solution where you have to invest your hard-earned money. If your risk-taking capacity is low or you want to invest for the purpose of your children study or marriage or some other important reasons then you can't take risk at this moment so you have to invest in Fixed Deposit where your money will increase at the interest of 6.5% per year (may vary bank to bank) but capital is safe here. Here your capital is safe and you can withdraw whenever you want.
Stock Market-Investment
If you are able to take high risk then you can choose the Stock Market for investment purpose. Here your Risk and Reward ratio is high. Maximum possible return you can get 20-30% on your investment in equity. But remember that never invest all money in a single stock. If you want to invest in the stock market then knowledge of the market is compulsory you cannot invest by hearing from tv news or rumors. During investing in the stock market you should remember that your money can be zero in the worst condition.
If you are willing to enter into the stock market then you can diversify your money by investing some percentage of your money to FD and remaining in Stock Market to balance Risk-Reward Ratio. In both cases, patience is compulsory for good investors.
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