RBI Rate Cut: FD vs. Bonds – Weighing Risks, Returns, and Alternatives

• RBI's repo rate cut is pushing investors from FDs to bonds due to falling FD rates.
• Bonds carry risks like credit, interest-rate, and liquidity, which FDs typically do not, and lack the ₹5 lakh DICGC insurance FDs offer.
• Investors can choose between G-Secs (low risk, 5.6-6.7% return), SDLs (slightly higher return, similar safety), and Corporate Bonds (higher risk/return, 7-12%).
• Debt mutual funds are suitable for small investors, allowing SIPs from ₹500 and professional management of market fluctuations.
• Experts advise a mix of long and short-duration bonds for balanced risk and return, as long-term bonds benefit from falling rates but have higher volatility.

Why It Matters: RBI rate cuts affect your savings, guiding bond investment choices and risks.