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Ladder your fixed deposits to avoid the risk of reinvestment: Experts

Debt fund investors should keep the bulk of their investments in shorter-duration funds, 10-20% in longer-duration ones

Poor batting and dropped catches not helping matters, indicates Rohit Sharma
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Investors starting FDs now should opt for shorter tenures, so that they can roll them over into higher-rate deposits when the former mature

Bindisha SarangSanjay Kumar Singh
On August 5, the Reserve Bank of India (RBI) hiked the benchmark repo rate by 50 basis points (bps). It now stands at 5.4 per cent. Altogether, the RBI has hiked the repo rate by 140 bps in this cycle. Most economists expect the repo rate to rise to 5.75-6 per cent by the end of this calendar year. Fixed deposit (FD) and debt mutual fund (MF) investors need to calibrate their strategies for a rising-rate scenario.

FD rates rising with a lag
 
While FD rates have risen, the pace has been slow.

“The transmission of the increase in repo rate to

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First Published: Aug 08 2022 | 7:09 PM IST

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