India’s retail investors are swiftly pivoting away from traditional bank fixed deposits following the Reserve Bank of India’s surprising 50‑bps repo rate cut, bringing it down to 5.50 % on 6 June 2025 . With FD rates also slashed—HDFC and ICICI cutting deposit rates by up to 25 bps—savvy investors are hunting for better yields. Corporate bonds, offering higher returns albeit with marginal risk, are gaining traction as the go‑to alternative in this low‑interest environment.
This shift underscores growing financial literacy and flexibility among Indian savers. Instead of letting deposits languish, many are venturing into the bond market to preserve real returns. Financial advisors suggest carefully assessing credit quality and market conditions before diving in. As RBI’s neutral monetary stance reshapes the fixed-income landscape, the FD exodus may persist—prompting investors to diversify with asset-backed debt funds and quality corporate issues.
