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Bank FD laddering explained: How to maximise fixed deposit return with improving liquidity, managing interest rate risks
Mint 1 hr ago·25 Oct 2026, 6:55 am
FD laddering is a strategy where you split your fixed‑deposit amount into several deposits that mature at different intervals, such as three, six, nine and twelve months. As each deposit matures, you can either reinvest at the prevailing rate or use the funds, creating a rolling series of deposits.
The approach gives you regular access to cash, reducing the need to break a long‑term FD when liquidity is required. It also spreads interest‑rate risk: if rates rise, the maturing deposits can be locked in at higher yields, while earlier deposits still earn the lower rate.
Investors should keep an eye on the Reserve Bank of India's policy moves and any shifts in market rates, as these will affect the returns on newly‑rolled deposits. Periodically reviewing the ladder’s maturity mix can help align it with changing cash‑flow needs or retirement goals.
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