Options are limited for those who are risk-averse, say, senior citizens. “One can opt for FDs of leading NBFCs (non-banking finance companies) or corporate bonds that provide higher returns,” says Anurag Garg, founder and CEO, Nivesh, a wealth management firm. However, one must take particular note of the higher risk of default that these deposits entail.
Individuals who have higher risk tolerance (they may still be working, for example), can explore more options. “It is better to invest in lower-duration (debt) funds and gradually shift towards medium duration strategies over the next 2-3 quarters, to ensure that the portfolio remains resilient to potential interest rate risks,” says Nitin Rao, CEO, InCred Wealth, an investment service firm.
If you have higher risk appetite, then you can opt for riskier options like equity-related instruments such as equity mutual funds. Equity investments help beat inflation over the long term and can be considered over FDs, if one has a horizon of five years and above.
Overall Impact Of Low Rates