Neutral impactSector
Don’t Lock Your FD Yet: How To Ladder After The RBI Repo Rate Hike
NDTV Profit 3 hrs ago·13 Oct 2026, 12:13 pm
The Reserve Bank of India has increased the repo rate, making fixed deposits (FDs) more attractive by offering higher interest rates. However, locking all your money into a single FD for a long term can be risky. If interest rates rise further, you will miss out on the better returns available in the market. Conversely, if rates fall, you will be stuck with a lower yield. This scenario highlights the importance of a strategy known as FD laddering.
FD laddering involves dividing your total investment into several smaller FDs with staggered maturity dates. For example, you might invest equal amounts in FDs maturing in 1, 2, 3, and 4 years. This approach provides liquidity and flexibility, as portions of your money become available at regular intervals. It also allows you to reinvest the matured amount at whatever prevailing rates are available at that time, helping you maximize returns over the long term.
For retail investors, this strategy helps manage interest rate risk and ensures a steady flow of funds. It is particularly useful when you expect rates to keep climbing. Watch for announcements from banks on new FD rates and consider reviewing your existing investments to see if a ladder structure could benefit your portfolio.
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