The Reserve Bank of India’s recent policy tightening has nudged bank fixed‑deposit (FD) rates upward, making a ₹50 lakh to ₹2 crore deposit an attractive low‑risk instrument for salaried professionals. 5 lakh and ₹4 lakh per year respectively for a ₹50 lakh investment, while a ₹2 crore deposit yields between ₹12 lakh and ₹16 lakh annually. Such returns are especially appealing as the Sensex and Nifty hover around record highs, yet equity volatility and inflation pressures keep many investors seeking stable income streams.
5%‑1% to the base rate, pushing the effective yield to as high as 9%. However, the tax treatment remains unchanged: interest above ₹40,000 per year is taxed at the investor’s slab rate, eroding net returns. 5%‑6%) limit their appeal for large sums.
Investors should also weigh deposit safety; the Deposit Insurance and Credit Guarantee Corporation (DICGC) insures up to ₹5 lakh per bank, prompting many to spread large deposits across multiple institutions. Considering the current macro backdrop, a well‑structured FD ladder can provide predictable cash flow while preserving capital, complementing equity exposure in a portfolio that tracks the broader market trends reflected in the Sensex and Nifty.