Fixed Deposits, while safer investment instruments, do carry some risk. Banks are liable to pay a maximum amount of Rs. 1 lakh in case of a default. However, we have not recorded any default from a bank yet, but in recent times due to economic scenarios, some banks have faced moratoriums where RBI can implement limits on the withdrawal of savings from the bank's facing moratorium. Fixed Deposits are inefficient from both inflation-adjusted returns and tax incidence point of view. When you invest in the market with the appropriate risk profile and instruments like Debt Mutual Funds or Liquid Funds for capital preservation, then the chances of losing your capital are minimal.