Worried About Falling Fixed Deposit Interest Rates? There Are Solutions!

The rate of interest on investments is one of the strongest indicators of economic activity. They directly affect the consumption of people and can also impact the day-to-day life of general people. The cut in the rate of interest has positively impacted the borrowers, but the lenders, savers, and investors have negatively impacted. The falling rate of interest makes borrowing easier. In other words, we can say that cost of funds or loans becomes comparatively cheaper. This increases the number of people who avail of auto loans, home loans, and various other loans that help to fund large or small credit base purchases like cars, homes, etc.

Read more
Best Investment Plans
  • Save upto ₹46,800 in tax under Sec 80C

  • Inbuilt Life Cover

  • Tax Free Returns Unlike FD+

In-built life cover
Get Guaranteed returns upto 7.5%*
Invest in 100% Guaranteed Return Plans with Tax benefits under sec 80C & No Tax on returns*
+91
Secure
We don’t spam
View Plans
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs Tax benefit is subject to changes in tax laws
Get Updates on WhatsApp
We are rated~
rating
58.9 Million
Registered Consumer
51
Insurance Partners
26.4 Million
Policies Sold

This increases the demand for such products helps to improve the economy of the country. Inversely, the rise in the rate of interest dampens consumption because of higher borrowing costs. However, the savers get benefits in such scenarios because they get an attractive rate of interest on their deposits and savings.

Let us take a closer look into the currently falling rate of interest, analyze the impact of the same on investments and savings and get to know what should be done for staying protected or get benefit from the current situation.

Comparison Between
Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund
Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund
Guaranteed Return Plans
Returns Before Tax
7.5% (TAX-FREE)
Returns After Tax
7.5%
Guaranteed Returns
Yes
Life Cover
Yes
Tax on Profit
Tax Free*
Risk
No Risk
awards
Still Better than FD’s and Debt Mutual Fund
Fixed Deposits
Returns Before Tax
7% (TAXABLE)
Returns After Tax
4.8%
Guaranteed Returns
Yes
Life Cover
No
Tax on Profit
Taxable
Risk
Low Risk
Debt Mutual Fund
Returns Before Tax
8% (TAXABLE)
Returns After Tax
5.5%
Guaranteed Returns
No
Life Cover
No
Tax on Profit
Taxable
Risk
High Risk
VIEW PLANS
*For annual premium upto ₹5 Lacs

Why Are the Rates of Interest Falling?

The interest rates are falling constantly in the last three to four years. The primary reason for the cut in interest rates is fragile economic conditions and rate cuts by central banks across the world for simulating the economy. Such conditions lead to excess liquidity that makes access to the funds more affordable. This trend is being noticed since the demonetization that took place in the year 2016.

The decline in interest rates has flattened lately, but due to COVID–19, it is accelerating. The pandemic has forced the central banks of the world to lower the interest rates to stimulate the economy. Resultantly, many countries are even facing zero to a negative rate of interest.

Impact of Falling Rates of Interest on Investments and Savings

Falling rates of interest consecutively drop the investment yields and income. Currently, the FD interest rates of all banks are falling. The investment options that are considered safe like savings bank accounts, and bonds are also getting affected negatively because of the drop in interest rates.

FD interest rates India have fallen consistently over the last 12 years.
Invest in Plans that offer Guaranteed Returns for over 25 Years

How to Stay Protected and Get Benefit from Investments in Current Scenario?

Even though the investors and savors are seeing a considerable drop in return and income which are a result of falling rates of interest, there are as well few options available as bonds fixed income mutual funds, and deposits that can give benefits in this situation.

  • Government Bonds or GILTS: The bonds that are issued by the government are known as government bonds. You can invest in these bonds through EFTs, mutual funds, or directly. As an investor of these bonds, you can get benefits from a falling rate of interest. However, this investment option is ideal for you if you want to invest for the long term.

  • High Yield Credit Risk Funds: Credit risk funds are a type of aggressive debt funds wherein 65% of the portfolio is invested in low credit funds. Resultantly, they create high returns. As an investor of these funds, you can allocate a suitable portion of your investment portfolio in the segments as per your risk appetite to get benefits from a higher yield.

  • Medium to Long-Term Bond Funds: If you invest in medium to slight long-term deposits or bonds, you can keep your investment away from falling rates.

  • Fixed Maturity Plan (FMP): A mutual fund scheme that is close-ended and time-bound that invests its corpus in bonds and fixed income papers is known as a fixed maturity plan or FMP. The tenure of a fixed maturity plan may vary from months to a few years based on the offering. This scheme generally locks into prevailing rates of interest and hence helps the investors to guard against a drop of income because of the falling rate of interest.

  • Sweep In Fixed Deposits: Some banks provide sweep in fixed deposit schemes. These FDs help you to convert your savings into fixed deposits for earning a higher rate of interest. Locking in the investment for a longer period may help to get a better return. Many banks provide the flexibility to access these funds in case of an emergency.

    fd return beater
  • Roll Down Maturity Fund: A open-ended maturity fund that is similar to FMP wherein the investments are held to maturity. It provides benefits for a specific duration of holding.

  • Ultra-Short-Term Funds: The medium to short-term funds that you can hold for six months to two years are known as ultra-short-term funds. As an investor of these funds, you can earn a slightly higher return at the same time you can maintain liquidity.

  • Sovereign Gold Bonds (SGB): The government issues gold bonds and they reflect underlying gold price and an additional 2.50% per year. Despite being the tenure of the gold bond being eight years, early redemption or encashment of these bonds is allowed after completion of the fifth year from the issuance date upon coupon payment dates.  

The Final Words!

Most investors worry about falling interest rates on investments of fixed income, however, mutual funds can position themselves to provide benefits from falling rates of interest. So, in the current times when FDs are providing low rates of interest, you can opt for these alternate investment instruments.

You may like to Read: SBI Interest Rates on Fixed Deposits

Allahabad Bank FD Interest Rates

Allahabad Bank FD Interest Rates

Andhra Bank FD Interest Rates

Andhra Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

Axis Bank FD Rates

Axis Bank FD Rates

Bajaj Finance FD Interest Rates

Bajaj Finance FD Interest Rates

Bandhan Bank FD Interest Rates

Bandhan Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of India FD Interest Rates

Bank of India FD Interest Rates

Bank of Maharashtra FD Interest Rates

Bank of Maharashtra FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Canara Bank FD Interest Rates

Canara Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Central Bank of India FD Interest Rates

Central Bank of India FD Interest Rates

Citibank FD Interest Rates

Citibank FD Interest Rates

City Union Bank FD Interest Rates

City Union Bank FD Interest Rates

Corporation Bank FD Interest Rates

Corporation Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

DBS Bank FD Interest Rates

DBS Bank FD Interest Rates

Dena Bank FD Interest Rates

Dena Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

HDFC Bank FD Interest Rates

HDFC Bank FD Interest Rates

HSBC FD Interest Rates

HSBC FD Interest Rates

ICICI Bank FD Interest Rates

ICICI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDFC First Bank FD Interest Rates

IDFC First Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

IndusInd Bank FD Interest Rates

IndusInd Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Muthoot Capital

Muthoot Capital

Nainital Bank FD Interest Rates

Nainital Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

PNB FD Interest Rates

PNB FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

RBL Bank FD Rates

RBL Bank FD Rates

Saurashtra Gramin Bank FD Interest Rates

Saurashtra Gramin Bank FD Interest Rates

SBI FD Interest Rates

SBI FD Interest Rates

Shriram Finance FD Interest Rates

Shriram Finance FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Travancore FD Interest Rates

State Bank of Travancore FD Interest Rates

Syndicate Bank FD Interest Rates

Syndicate Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

UCO Bank FD Interest Rates

UCO Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Union Bank of India FD Interest Rates

Union Bank of India FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Yes Bank FD Interest Rates

Yes Bank FD Interest Rates

Expand

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
+ Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
#Discount offered by insurance company
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

FD Calculator

Total Investment

₹500 ₹30L
Enter Total Investment

Rate of Interest (Yearly)

1% 15%
Rate of Interest (Yearly)

Time Period

1 Year 15 Years
Enter Time Period
Interest Earned
Maturity Amount

FD Rates articles

Recent Articles
Popular Articles
BOI FCNR (B)

10 Jul 2024

BOI FCNR (B) Deposits, also known as Foreign Currency
Read more
BOI NRE Term Deposit Account

10 Jul 2024

BOI NRE Term Deposit Account is a fixed deposit account offered
Read more
BOI RFC Term Deposit

10 Jul 2024

BOI RFC Term Deposit is a fixed deposit account offered by the
Read more
BOI NRO Term Deposit Account

10 Jul 2024

BOI NRO Term Deposit Account is a fixed deposit account offered
Read more
BOI Current Deposits Plus Scheme

10 Jun 2024

The BOI Current Deposits Plus Scheme is a unique option for
Read more
Application for Withdrawal of Fixed Deposit
  • 03 Dec 2021
  • 22987
Fixed Deposits are the safest investment instruments. You invest the amount of your choice as the fixed deposit
Read more
Which Bank has the Highest Interest Rate for Fixed Deposit?
  • 23 Jul 2018
  • 211625
The Small Finance Banks offer the highest FD interest rates for a tenure between 7 days to 10 years. Unity Small
Read more
SBI Fixed Deposit Monthly Income Scheme
  • 04 Apr 2022
  • 12357
Fixed deposits are the safest investment vehicles for Indian financial planners. You can open a fixed deposit
Read more
SBI Fixed Deposit Double Scheme
  • 18 Feb 2022
  • 12584
The SBI Fixed Deposit Double Scheme is named Special Term Deposit to cater to investors looking to double their
Read more
Nominee Vs Legal Heirs for Fixed Deposits
  • 21 Dec 2023
  • 3285
Fixed deposits are a popular investment option for individuals who wish to earn a stable rate of interest on
Read more

top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL