Which is better Nifty vs. Bank Nifty?

  • Asked By
  • Updated On:
  • Replies:

Short Answer

The Bank Nifty is better for trading and investors with a high risk tolerance. Whereas Nifty is better for investors with a low risk tolerance.

Detailed Answer

Nifty and Bank Nifty indexes serve as benchmarks for the Indian stock market. Nifty contains the top 50 NSE-registered companies in India, while the Bank Nifty represents the most liquid and well-capitalized banks. These indices represent the overall performance of the sectors they include.

Both Nifty and Bank Nifty are considerably safer for investment and both have their own pros and cons. Therefore, today we will discuss which of these two is better.

Which is better Nifty vs. Bank Nifty?

We will decide the best based on the following factors :


Bank Nifty only includes one sector—the 12 most liquid and well-capitalized banks, while Nifty contains the top 50 companies that are part of the best sectors of the economy, i.e., 14 sectors.

So there is more diversification in Nifty as compared to Bank Nifty.


The Bank Nifty is highly volatile as it contains only one sector, so changes in the banking sector will have a significant impact on the index as a whole. The Nifty, on the other hand, is less volatile.

3.Past Performance

Bank Nifty has produced a compound annual growth rate (CAGR) of 17.6 percent on price terms (PRI) over the past 22 years, while the Nifty 50 has produced a CAGR of 11.5 percent on PRI. This indicates that over the long term, the Bank Nifty has outperformed the Nifty.

Nifty vs. Bank Nifty - Which is better?

Since Nifty has a lower risk factor, it is better for portfolio diversification and investors with a low appetite for risk. Whereas Bank Nifty is better for trading and investors with a higher appetite for risk.

Tagged With: nifty vs bank niftyniftybank niftyinvestmentstock trading
Categories: Stock Market
Ask Your Query for FREE, Get quick answers from our FINTRAKK community!
Discussion (0)
Related FAQs
Which is better Groww vs. ICICI Direct?

As online trading is getting popular every day, it is becoming even more important to choose the right trading platform. Choosing the best trading platform can give you more flexibility to trade in the various trading market.

Is Paytm Money better than Zerodha?

You wish to know if Paytm Money is better that Zerodha or it's the other way round. Zerodha being a leading discount broker in India has been there for overe a decade now. While Paytm Money already established in mutual fund investment arena, but a fairly new entrant in stock broking industry. So, let's compare the features and discuss few details on each of them.

Is Zerodha better than Paytm Money?

Yes, Zerodha is much better than Paytm money, thanks to the discrete offerings that Zerodha brings to the table. Zerodha has been in the stock brokering business for a decade whereas Paytm money was founded in 2017. The experience, knowledge, tools, and trading options provided by Zerodha are quite prominent and useful when compared to Paytm money.

Is Zerodha better than Interactive Brokers?

Interactive Brokers & Zeodha are two Brokers from the Discount Broking community but both are quite different from one another in terms of Features and Working. One is an Indian discount Stock Broker whereas the other is a U.S based Discount broker that has its branches in many countries. Let's look at them in depth below.

Which is better - Investing in Real Estate vs. Stocks?

Real estate is great if you’re looking to lease out the building to have a steady income. No doubt, in the long run, the land also could be sold to make a huge profit.

Stocks are quite liquid, but you can keep adding to them whenever there is a dip in the market. The selection of stocks to invest in is quite important. Both the investment criteria are feasible, but then the risk is there in both, and you should choose the ones that you understand better.

Is it possible to make Rs.50,000 in profit with your investment?

Making profits off the stock market is easier said than done. However, if you want to make 50,000 rupees as profits, you would have to consider intraday and F&O options in trading. But then factors such as stock selection, investment amount do play a significant role in the profits your reap.

What is difference between Fixed Deposit vs Mutual Fund? Meaning

Fixed Deposit (FD) are saving tools offered by banks to deposit lump sum amount for a fixed period of time on a higher interest rate than saving accounts. Mutual funds are investment products which pool money from numerous small investors to create a fund.

How to choose stocks for long term investment in India?

There are various terms that play a huge role in determining how to choose stocks for long term investment such as P/E ratio, dividend consistency, etc. For a more elaborative information head below and read the explanation given for better understanding.

What are important things to keep in mind for stock market beginners?

For any beginner who is getting started in the stock market, you need to be aware of the broker you choose, the investment strategy, not letting emotions play in your investment and trading desires, and not trading with money that you can’t afford to lose.

How to know which stocks to trade in with so many companies listed?

One can either invest in bluechip companies or research extensively on the companies they feel would give returns. It also comes down to the type of investment they are ready to make. Hence, figuring out the different companies could take time, experience, and research.