Fixed-income investments: Look beyond returns, weigh credit risk, lock-ins

Ladder investments across tenures to manage reinvestment risk, maintain liquidity, and balance returns amid falling interest rates and limited fixed-income options

Interest rates in the Indian economy are on a downward trajectory. The Reserve Bank of India (RBI) paused rate cuts for a second time last week, providing relief to fixed-income investors. Rates on bank and company fixed deposits (FDs) have fallen since the start of calendar year (CY) 2025.

 

The RBI has already reduced the repo rate by 100 basis points this year. “One last rate cut of 25 basis points (bps) is possible owing to the downward revision in inflation projections and the RBI governor’s statement that this opens up space for further policy action,” says Joydeep Sen, corporate