‘You lost value even while saving’: Finfluencer says FD rates in India are a scam, returns don’t add up

Finfluencer Akshat Shrivastava on Sunday described fixed deposit (FD) returns in India as a “scam”, citing tax burdens, inflation, and currency depreciation as key factors that erode real gains. “Why FD rates in India are a scam,” Shrivastava posted on X, comparing the Indian and UAE financial environments.

He explained, “In UAE: people make tax-free 8% on FDs. 4.5% is the FD rate. INR falls 3-4%/year compared to USD/AED. Tax = 0%. So roughly 8% risk-free returns (post taxes) in INR terms.”

“In India: FD rates, 7%. Taxed at slab. Post tax (30% tax bracket) = 4.9%. Official inflation = 5% (last 5 year average).”

Shrivastava later expanded on the broader implications in a separate LinkedIn post, arguing that Indian investors often overlook the impact of currency depreciation. 

“In 2023, the best-performing stock market in the world was Pakistan. You know why? Due to currency debasement. Even well-educated people in India don’t get a simple point: that if currency depreciates (compared to other currencies), it hurts you.”

He noted that the INR has depreciated at an average of 3–4% annually over the past decade, which he said results in a compounded erosion of purchasing power. “You are seeing the results on ground: most of the properties in India are being bought by either black money guys or NRIs. This situation would not have been so bad if there was a proportionate rise in salary.”

According to him, average salary growth in India over the last 10 years has been just 0.4% CAGR, making it difficult for most salaried individuals to keep up with the real cost of living. “If you worked and saved money over the last 10 years and put that money in INR-denominated assets, again they lost value.”

He urged investors to benchmark returns to a base currency like the USD when evaluating long-term performance: “The next time you are calculating your Mutual Fund returns or Real Estate returns from India: convert those returns to USD and see.” “Of course your schools/college would never teach you such practical finance. So you gotta experience it the hard way,” he added.