<b>Your Money:</b> Opt for short-term debt funds as an alternative to FDs

These funds carry low risk & should be able to beat the returns from fixed deposits

With interest rates in fixed deposits (FDs) in banks declining, an option before FD investors is to look at debt funds, which carry low risk.

The interest rate on the one- and two-year FDs of the State Bank of India today stands at 7.05 per cent. But with banks continuing to cut lending rates (IDBI and State Bank of Travancore cut them last Friday), fixed-deposit rates could fall further, given that liquidity in the banking system is likely to remain in surplus for some time. In such a situation, one option before FD investors is to go for debt fund