Nifty vs FD: What ₹1 crore invested at past market bottoms would be worth today

Investors who shift money from equities to fixed deposits after a prolonged market slowdown risk missing out on potential long-term gains, Rishabh Zaveri, Director at Anand Rathi Wealth Limited, said, highlighting how investment horizons and compounding can influence wealth creation.

“2 YEARS OF NO RETURNS IN EQUITIES. AND INDIA HAS SUDDENLY PRODUCED 10 CRORE FD EXPERTS!” Zaveri said in a commentary on investor behaviour during periods of market volatility.

“Sir, why take risk? FD is giving 8%!” he added, pointing to the renewed appeal of fixed deposits when equity markets deliver disappointing returns.

His observations come amid a debate over whether investors should prioritise the predictability of fixed-income instruments or remain invested in equities through market cycles.

How ₹1 crore grows across asset classes

An illustrative comparison of investments made near historical Nifty market bottoms shows how different assumed returns and investment durations can produce sharply different outcomes.

According to the comparison, ₹1 crore invested near the October 1998 market bottom would have grown to approximately ₹29.76 crore in the Nifty by September 2026. A fixed deposit earning a constant annual return of 8% would have grown to around ₹8.62 crore over the same period.

For an investment made near the October 2008 market bottom, the corresponding figures are approximately ₹8.96 crore for the Nifty and ₹4 crore for the fixed deposit.

The comparison also includes market lows in September 2001, December 2011, February 2016 and March 2020, illustrating how investment duration and subsequent market performance affect the final corpus.

However, these figures are illustrative and depend on the selected entry dates and return assumptions. The historical market bottoms are identifiable only in hindsight, and investors cannot reliably predict when a market has reached its lowest point.

Compounding can magnify return differences

Zaveri's commentary also highlights the mathematical impact of compounding over extended periods. Even relatively small differences in annualised returns can translate into substantial differences in accumulated wealth over decades.

However, the comparison requires careful interpretation. Nifty price-index returns exclude dividends, while actual mutual fund returns depend on the scheme, expenses, investment timing and whether dividends are reinvested.

The graphic's mutual fund illustration assumes an additional four percentage points of annual return over the Nifty. This is a hypothetical scenario, not a representation of actual mutual fund performance or a guaranteed outcome.

FD certainty versus equity volatility

Fixed deposits can provide predictable returns and are suitable for emergency reserves and short-term financial goals. Equities, meanwhile, offer the potential for higher long-term returns but expose investors to market volatility and the risk of capital losses.

The relevant decision is therefore not simply whether equities outperform fixed deposits, but whether an investor's asset allocation matches their financial goals, investment horizon and ability to withstand losses.

Past recoveries demonstrate the potential benefits of staying invested, but they do not guarantee future outcomes. Investors must balance liquidity and capital protection with long-term growth rather than making allocation decisions solely in response to recent market performance.