Explore the alternatives to fixed deposits in India for flexible and rewarding investment returns to grow your money at lower risk.
Fixed Deposits are considered one of the most reliable investment options. They provide a sense of security for investors who don’t want to take big risks. Furthermore, FDs are accessible and easy-to-use for all types of investors. Investment alternatives such as government bonds, debt mutual funds, equity funds and chit funds have seen a surge in demand over the past few years. These options not only offer better returns but also allow investors to diversify their portfolios.
| Bank FD Names | For General Citizens (p.a.) | For Senior Citizens (p.a) |
| State Bank of India FD | 3.00% to 7.10% | 3.50% to 7.60% |
| HDFC Bank FD | 3.00% to 7.10% | 3.50% to 7.75% |
| ICICI Bank FD | 3.00% to 7.10% | 3.50% to 7.60% |
| IDBI Bank FD | 3.00% to 7.15% | 3.50% to 7.65% |
| Kotak Mahindra Bank FD | 2.75% to 7.20% | 3.25% to 7.70% |
| RBL Bank FD | 3.50% to 7.80% | 4.00% to 8.30% |
| KVB Bank FD | 4.00% to 7.50% | 5.90% to 8.00% |
| Punjab National Bank FD | 3.50% to 7.25% | 4.00% to 7.75% |
| Canara Bank FD | 3.25% to 7.15% | 3.25% to 7.65% |
| Axis Bank FD | 3.50% to 7.26% | 3.50% to 8.01% |
Alternative Investments to Fixed Deposit
Recently, FD alternatives have gained a lot of traction as they offer higher returns compared to fixed deposits. In this article, we’ll explore the various investment options that are available to investors.
- Sovereign Gold Bonds (SGBs)
Market uncertainty often leads to investors turning to gold as a secure option. The Sovereign Gold Bond Scheme is a form of public security denominated in gold units, allowing investors to own gold without having to actually purchase physical bullion. It’s an efficient and practical way of investing in gold. By subscribing to this scheme, for every unit of gold you get, an equivalent amount of bonds will be credited to your account. You can then cash in on both gold prices and bond returns as they mature. This way, you take advantage of all possible benefits! As an alternative to fixed deposits, the Reserve Bank of India (RBI) provides a great security through purchasing bonds. They provide stability and are ideal for long-term investments.
- Government Bonds:
Government bonds are now a preferred option for investors over fixed deposits, second only to stock investments. Putting your money into such securities can provide you with stable returns and diversification of your portfolio. Investing in government bonds takes a lot of consideration as it comes with a longer commitment and can be difficult to understand. However, the returns on such investments are not bad, even though they may not be extraordinarily high. Rest assured that your money will not go to waste with government bonds.
- Corporate Fixed Deposits
Investing in Business Fixed Deposits (BFDs) is a great choice if you prefer to diversify your portfolio. Unlike Fixed Deposits, BFDs offer variable tenors and higher returns than regular FDs. While corporate FDs may give higher returns, it is less secure than a standard fixed deposit. To be safe, be sure to invest only in FDs from respectable and well-established companies.
- Public Provident Fund
PPF is the Government of India’s retirement savings plan that guarantees a comfortable financial life after retirement. It requires a minimum annual deposit of Rs. 500, with a maximum limit of Rs. 1.5 lakhs, to start & maintain this facility.
- Fixed Maturity Plans
Fixed Maturity Plans (FMPs) are one of the many convenient alternatives to fixed deposits. They provide you with an opportunity to invest your money in debt securities such as bonds and other financial instruments. With a variety of different maturity periods to choose from, ranging from months to years, investors can find a plan that perfectly fits their current and future requirements. This allows you to make the most out of your investment.
Fixed maturity plans may provide limited liquidity, however they offer higher returns than standard fixed deposits and are much less risky than other FD alternatives.
- Money Market Fund
Investment in a mutual fund of the liquid and near-term nature involves allocating your money to cash, cash-correspondent securities, and debt-based securities with a shorter maturity period. This strategy is meant to provide short-term returns.
Money market funds are specifically designed to give investors a combination of high liquidity and low risk. It is also commonly referred to as money market mutual funds.
- Kisan Vikas Patra
Kisan Vikas Patra is a secure and beneficial small savings program launched by the Indian Government. It offers a fixed return rate to investors which can double their invested capital after 124 months of investment. It’s an easy way to secure your financial future.
- P2P investing
Peer to peer (P2P) investing is becoming an increasingly popular investment option for those looking for higher returns with low risk. Compared to a fixed deposit (FD), P2P investing offers a number of advantages such as higher returns, access to more diverse investments, and greater liquidity.
The P2P investment via Monexo allows investors to invest directly in borrowers without the need for any middlemen or financial institutions. This eliminates the need for fees and commissions, making it a great option for those who are looking for higher returns on their investments.
Overall, P2P investing is an attractive option as it offers high returns with low risk. Investors should consider this option if they are looking to maximize their investment potential while minimizing their risks.
Final thoughts
| Investment instrument | Avg return per year |
| Sovereign Gold Bonds (SGBs) | 2.50% |
| Government Bonds | 6.89% |
| Corporate Fixed Deposits | 8-10% |
| Public Provident Fund | 7.1% |
| Fixed Maturity Plans | 8.44% |
| Money Market Fund | 10% |
| Kisan Vikas Patra | 6.9% |
| Monexo P2P investing | 13% |
Investing in Fixed Deposits (FD) is a safe and secure option for those who are looking for low risk and steady returns. However, if you want to get higher returns with low risk, then investing through Monexo in Peer to Peer lending could be the right choice for you. P2P lending offers higher returns than FDs and other traditional investment options like Gold bonds, Public Provident Fund (PPF), and Government bonds. Moreover, it is one of the safest investment options available as it comes with features like low default rate, diversification of funds across various borrowers, and risk management tools.
