Veteran investor Shankar Sharma has reignited the long-running debate between equity investing and traditional fixed deposits after sharing a data-driven comparison of Nifty returns and bank FD performance over the last 12 years.
In a post on social media platform X, Sharma, Founder of GQuant Investech, said he casually analysed Nifty data on a “beautiful lazy Saturday morning” while sipping coffee, comparing post-tax and risk-adjusted returns of the Nifty 50 Total Return Index, the Nifty in dollar terms, and bank fixed deposits between May 15, 2014, and May 15, 2026.
What caught his attention was not just the return figures, but the sharp difference in risk-adjusted performance between equities and fixed deposits.
“This beautiful lazy Saturday morning, sipping on the best coffee in the world, smooth Caffè di Artisan Luxe Coffee, idly ran some 12-year NIFTY numbers and compared it to a Bank FD, both adjusted for taxes and risk. No conclusions. Just data,” said Shankar Sharma in his post on X.
Importantly, Sharma himself avoided drawing any explicit investment conclusion from the comparison and instead left the interpretation open to the public.
“Awaam kya kehti hai? No conclusions. Just data,” said Shankar Sharma while sharing the comparison between Nifty returns and bank fixed deposits over the 12-year period.
According to the figures shared by Sharma, the Nifty 50 Total Return Index delivered a post-tax CAGR of 9.38% during the 12-year period, while the Nifty in dollar terms generated a post-tax CAGR of 5.11%.
However, both equity calculations assumed an annualised volatility of 15%, significantly impacting their risk-adjusted return ratios. Sharma calculated the tax- and risk-adjusted return ratio for the Nifty TR Index at 0.617, while the dollar-adjusted Nifty figure stood at 0.336.
In contrast, bank fixed deposits delivered a lower post-tax CAGR of 4.93%, but because of their extremely low annualised volatility of 0.25%, the tax- and risk-adjusted return ratio surged to 19.720.
The post quickly triggered widespread discussion among investors, particularly because Indian equities are often marketed as the superior long-term wealth creation avenue compared to traditional savings products such as bank deposits.
Risk-adjusted returns take centre stage in investing debate
Sharma’s comparison highlighted a point often ignored during bull markets — that returns alone may not present the complete picture unless adjusted for risk, taxation, and currency depreciation.
“Bank Fixed Deposit (INR) delivered a post-tax CAGR of 4.93% with annualized volatility of just 0.25%. Its tax and risk-adjusted return stood at 19.720, while the return of capital remains guaranteed,” Sharma wrote in the post.
The data also reopened discussions around how Indian investors perceive volatility and long-term wealth creation. While equities have historically outperformed most traditional fixed-income products over long periods, market corrections, taxation and rupee depreciation can materially affect realised investor returns.
Sharma’s dollar-based Nifty comparison drew particular attention because it reflected the impact of rupee depreciation over the years. While Indian investors often focus on index gains in rupee terms, global investors evaluate returns after currency conversion, making the effective returns considerably lower.
“Nifty 50 Index (USD) delivered a post-tax CAGR of 5.11% over 12 years. Once taxes and annualized volatility of 15% are adjusted, the tax and risk-adjusted return ratio falls sharply to just 0.336,” Sharma noted.
The discussion also comes at a time when Indian equity markets are facing heightened volatility amid global macro uncertainty, geopolitical tensions and concerns around slowing earnings growth in some sectors.
At the same time, bank fixed deposits have become relatively more attractive over the last two years because of elevated interest rates, allowing conservative investors to earn stable post-tax returns without exposure to equity market swings.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
About The Author
