Traditional Fixed Income instruments

Bank fixed deposits and Government small savings schemes have been the traditional investment choice of average Indian households. As per Reserve Bank of India’s Quarterly Estimates of Household Financial Assets and Liabilities, Rs 4,753 billion was invested in bank FDs in FY 2018 (latest year for which data is available from RBI). On the other hand, despite its growing popularity, share of mutual funds in household fixed income assets is still relatively quite small. As per AMFI data (February 2020), retail and HNI net investment in debt mutual funds in the last one year (ending Feb 2020) was Rs 260 billion.

FD and small savings schemes’ interest rates on declining trend Bank FD interest rates have generally been declining over the last 20 years, from 10 – 11% in 1999 to just around 6% in 2020.


Similarly, Government (Post Office) small savings schemes’ interest rates are also on a declining trend over the last 20 years from 12% to around 7% in 2020.


The Government has already announced cut in interest rates of small savings schemes. In the long term also, we may see further decline in interest rates as inflation goes down in our economy.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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