For generations, bank fixed deposits (FDs) have been synonymous with safety and assured returns for Indian households. However, with the Reserve Bank of India (RBI) entering an easing cycle and banks gradually lowering deposit rates, investors are beginning to reassess whether traditional FDs alone can meet their income and wealth creation goals.
The decline has been significant over the years. A one-year fixed deposit that offered nearly 8.5% in 2015 now fetches around 6.9%, reducing real returns after taxes and inflation. As yields soften, investors are increasingly looking beyond conventional deposits to government securities, state development loans (SDLs), corporate bonds and other fixed-income products that offer a better balance of returns, risk and diversification.
