Worried about Falling FD Interest Rates? Here’s a Solution


The interest rate is an important indicator of the economic state. The interest rates on deposits have to be lower to cope up with the present fragile economic situation and according to the government regime. 

But lower interest rates have left investors worried. If talking about FD rates today, it lies between 4% – 6% with banks for a tenor of 7 days to 10 years. 

Set back with higher interest rates

Consequently, there is a drop in income and yields on investment. Senior citizens and dependents on the safe investment options for their income are getting affected negatively. 

Smaller finance banks may be offering higher FD interest rates (up to 7-7.5%) than post office fixed deposit interest rates and bank interest rates, but such rates come with an element of risk due to the uncertainty of investments with small banks! 

The Solution

As a solution that can benefit investors in these times, you can consider Bajaj Finance Fixed Deposits with an interest rate up to 7.35%. Additional interest percentage for auto-renewal and an additional interest rate benefit for online deposits are also available with Bajaj Finance. 

Such high returns are much better than other fixed-income investment plans such as Public Provident Fund (7.1%) and National Savings Certificate (6.8%) and Post Office Time Deposit (6.6%).

Bajaj Finance FD offers unparalleled ease of investment with the flexibility to choose tenor and interest payout frequency as per your needs. The online FD calculator will help you to estimate returns and the total amount to be received at the maturity of your fixed deposit. 

Other Investment Avenues 

There are a few investment options such as bonds and fixed income mutual funds that can be used as regular income avenues by keeping the preservation of capital at priority rather than maximization of returns. Let’s take a look at these:

  1. Government Bonds

Long term investors can be benefited from government-issued bonds directly or through mutual funds. However, unlike fixed deposits, these are not suitable for short or medium-term investments. 

  1. Fixed Maturity Plan

Fixed Maturity Plan (FMP) is a time-bound mutual fund scheme that usually locks funds into prevailing interest rates and protects your income against any fall in interest rates. You can invest in this plan only during new fund offers offered by any asset management company. Thus, it does not offer the same level of ease and flexibility which an FD offers. 

  1. Sovereign Gold Bonds

Sovereign Gold Bonds linked to the market price of underlying gold and an additional annual return of 2.50 % and gold price are to be increased in the coming days. It is used as a risk-hedge tool against inflation. 

The Subscription Window is to be closed soon. The permissible investment volume is 1 gram – 4 Kg. Financial advisors suggest that 10-15 % of your funds can be invested in this long term investment of 8 years. 

One of the top gold-linked return investment tools in a non-physical form but with the limitation of premature withdrawal. 

  1. Liquid Funds 

These are short term money market and debt instruments having low-to-moderate risk and aimed at optimal returns through investments in Commercial Papers, Call Money, Treasury Bills, etc. You can invest in up to 91 days. It is a better option for investors having a low-risk appetite and seeking liquidity without volatility. 

The Bottom Line

After researching all the above investment avenues, it is evident that fixed deposits are an ideal investment because of high returns, liquidity, ease of investment, periodic interest payouts, additional interest rate benefit for specific customer categories, and more such value-added features. You can check for your returns before investing with the help of the online FD calculator.