Why Gen Z is Ditching FDs & LIC for Smarter Investments

 Ask your parents or grandparents where they put their money, and 9 out of 10 will proudly say:

👉 “Beta, FD kara rakha hai!” or
👉 “LIC liya hai, life secure hai!”

For them, Fixed Deposits (FDs) and LIC policies were like that one safe locker key in the cupboard — untouchable and trustworthy.

But talk to someone in their 20s today, and you’ll hear:
“Bro, FD? That’s just parking money for inflation to eat it alive.”
😂

So why exactly does Gen Z roll their eyes at these “golden” old-school money tricks? Let’s break it down.

1. FDs = Safe but Boring

Imagine you put ₹1 lakh in an FD. Bank says, “We’ll give you 6% interest.”
Sounds good, right? But then inflation (the rising cost of everything from chai to iPhones) eats up around 6% every year too.

Result? After a year, your ₹1 lakh has technically grown to ₹1.06 lakh, but it still buys the same (or fewer) samosas as last year. 🥲

Gen Z looks at this and says: “Why should I lock my money if it’s just running on a treadmill?”

2. LIC = Confusing Combo Meal

Our parents loved LIC policies because they thought it’s insurance + investment = double benefit.
But honestly? It’s like ordering a thali where:

  • The rice is half-cooked (insurance cover is low).

  • The curry is bland (returns are meh).

Gen Z is like, “Bhai, if I want insurance, I’ll take a pure term plan. If I want returns, I’ll invest in index funds or stocks. Why mix it up and pay extra?”

3. Flexibility is King 👑

FDs say: “Lock your money for 5 years.”
LIC says: “Pay premiums for 20 years.”

But Gen Z? They’re the Swiggy-Zomato generation. If they don’t like something, they uninstall it. Fast.
So why would they stick to a financial product that ties their hands for decades?

4. Trust Has Shifted

Earlier, people trusted only banks and government babus.
Today, Gen Z trusts apps like Zerodha, Groww, Paytm Money.

  • Old school: visiting bank branch with 10 photocopies of PAN card.

  • New school: buying an ETF at 2 a.m. in pyjamas.

Which one sounds cooler? You know the answer.

5. The FOMO Factor

Let’s be real. Gen Z sees friends making money in stocks, crypto, startups, side hustles.
When someone flexes, “I made 20% return in Tesla stock,” an FD giving 6% feels like showing up to a Goa party in a kurta pajama. 🥲

🚀 The Takeaway

It’s not that FDs or LIC are “bad.” They’re safe, yes. But safe won’t make you rich.
That’s why Gen Z prefers:

  • Term insurance (for safety)

  • Mutual funds/ETFs (for growth)

  • Emergency FD (just in case)

Basically, they want money to work for them, not just sit safely under a blanket.

✨ Final Thought:
Our parents wanted safety.
Gen Z wants freedom + growth.
And maybe the smartest way forward is to mix a little of both.

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