FD Calculator India: Where To Invest Now When Interest Rates Are Falling?

Most banks have reduced interest rates on Fixed Deposits (FDs). However, still, some small savings investment schemes, small finance banks, and companies are offering higher FD rates in India between 6% – 7%. FD is one of the fixed income products that many Indians trust for stable and assured earning.

Reasons for Reduced Interest Rates

The repo rate is stable now but it has been cut down twice by the apex bank, Reserve Bank of India, since the beginning of the year and as a result banks have cut interest rates on most of the investment avenues. That’s how this lower interest rate regime has affected returns of fixed deposits in India

Can you ignore Fixed Deposits?

Although the FD interest rates are not so high, still you cannot afford to ignore Fixed Deposits completely. Even though the interest rates are lowered but you can still earn reasonable returns along with the safety of your principal investment amount. Senior citizens and retirees are the most benefited lot of investors with the provision of an additional interest rate benefit. For example, with Bajaj Finance FD, senior citizens can earn an additional 0.25% interest rate. 

However, you need to compare and evaluate various FD schemes and also diversify your investments beside FDs in the scenario where FD interest rates are declining. 

Diversifying Options

So, what are the options available beside FDs to meet one’s financial needs? The following are the options available to be considered:

1. Post office Monthly Income Scheme: Small savings-investment schemes are one of the government-backed lowest risk investments to earn a fixed income. Risk-averse investors and senior citizens can deposit a minimum amount of Rs.1,000 and a maximum of 4.5 lakhs for 5 years at 6.6%. The investment amount is disbursed monthly.  However, the returns are much lower as compared to company FDs such as Bajaj Finance FD which offers high FD rates up to 7.35%.

2. Company Fixed Deposits – Company FDs pay much higher returns as compared to bank FDs and post office FDs. As mentioned above, currently Bajaj Finance FD is offering one of the highest FD rates in India up to 7.35%. Moreover, you can earn an additional 0.10% if you choose to invest online and an additional 0.10% if you go for an auto-renewal. Besides, you can invest in the Systematic Deposit Plan from Bajaj Finance which offers flexibility of investment as you can start an SDP with a minimal investment amount of Rs. 5000 per month. You are provided an online FD amount calculator to get an exact estimate of returns on your investment with Bajaj Finance FD.

Company FDs will offer unmatched flexibility in terms of choosing the tenor and interest payouts, premature withdrawal of funds and loan against FD. Some deposits like Bajaj Finance FD also offer the assurance of guaranteed returns with the highest credit ratings from CRISIL and ICRA.

3. RBI Savings bonds: Any Indian citizen can invest in the RBI bonds. It will be issued only in electronic form in the designated bank account. One can invest in the multiples of Rs.1,000 for 7 year at an interest rate of 7.15%. There is no maximum investment limit. Specified categories of senior citizens are allowed to withdraw at a premature date. Interest will be paid twice in a financial year without the cumulative interest facility.

4. Debt Mutual Funds: Short term investors can look at the debt mutual funds to invest in fixed income securities such as bonds, government securities, Treasury bills, etc. for six to twelve months. It is less risky than equity. They can be redeemed at any point. Lower risk investment. Gilt Funds are a better option here. 

The Bottom Line 

Consider important factors – liquidity, safety, the risks involved, and taxation; fixed deposits perform better than any other investment. Irrespective of the size and natire of your portfolio, a fixed deposit investment can always add value to your portfolio and help you achieve your financial goals.


Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory