It is very rare to find banks that offer fixed deposit tenors of up to 10 years. Most banks provide long term deposits in the long term category only of up to 5 years. And the others offer a tenor of 8-10 years. If you manage to deposit in the 10 year deposit scheme, it might benefit you much, considering the inflation rate after 10 years.
Most investors miss to factor in the inflation rate when it comes to depositing funds. Although the interest rate is being given at approximately 10.25-10.50% p.a, it may not help you much in future. All your strict savings regime, that you as an investor, might have followed for 20-30 years, may not be of any use if at the end you opt for a personal loan or a credit card loan to finance part of your financial requirements. The best way to secure yourself from any debt pursuits is to compare what can be the inflation rate after 10 years and the rate of return which the banks promise to provide. If the interest rate is lower than the rate of return, then your savings are on the right track. If not, its better you move savings out of from that particular fund and invest in a deposit that can provide better returns.
Income funds are the better long term substitutes than fixed deposits that you as an investor can look into as they are much more profitable. Income funds are basically debt funds which invest in bonds and corporate deposits. Investing in this fund, offer the investors the edge of benefiting from high interest rates. The only disadvantage is that, these funds offer fixed rates, which means you as investor will not benefit from the upward movement of interest rates.
Apart from this disadvantage, the reason why it is most sought after is because it offers liquidity compared to the bank fixed deposits. The other best factor is that, if you are unhappy with the performance of this fund then you can exit without any penalty. If you hold income funds, you do not have the responsibility of renewing your fund unlike your fixed deposit or search for best interest rate. Your fund manager will be taking care of all such needs whereby your interest rates risks will be taken care of.
Before you start investing, make sure of reading the terms and conditions of your fixed income fund and analyze the pros and cons before you can finally decide.