As interest rates rise, many investors, including Saniya, a 32-year-old with a high-risk appetite, are contemplating whether to allocate surplus funds into fixed deposits (FDs) or debt funds. Expert Shweta Rajani suggests that Saniya's current portfolio, with 70% in equities, is well-structured for her age and long-term investment horizon of 20-25 years. Rajani emphasizes that equities historically yield returns of 12-14% over extended periods, advocating for a focus on long-term strategies rather than short-term market fluctuations. The decision to invest in FDs should primarily depend on liquidity needs, particularly if funds are required within a year. Tax implications also significantly influence this choice; investors in higher tax brackets might benefit from arbitrage funds for better tax efficiency. Rajani recommends a diversified approach, suggesting various equity schemes while maintaining a disciplined asset allocation strategy. Ultimately, staying invested through market cycles is crucial for long-term wealth creation.