Interesting Question.

Buying a house with your own money looks like a better option.

Key Reasons:

  1. Interest rate of home loan will always be higher than your FD interest.
  2. Interest Received on FD is taxable as per your income tax bracket
  3. Interest paid on home loan is only exempt upto 2 Lac

Now, what can be done which is even better.

  1. Keep Rs. 5–10 lac for liquidity need and take a loan of only that amount.
  2. Instead of putting this money in FD, Invest it in mutual funds. As this is going to be a long term investment balanced fund can be a good option from risk returns perspective.
  3. Real estate might not the best investment. Just rethink if are not dead set against it.

Mutual Fund Investment Options:

  1. Balanced Mutual Funds
  2. Debt Mutual Funds

Happy Investing!

Ishan Bansal