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Hit by falling FD rates? Consider these funds with 3-year horizon
Sarbajeet K Sen
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With the Reserve Bank of India (RBI) cutting the repo rate by 100 basis points (bps) since the beginning of 2025, banks have lowered their fixed deposit (FD) rates. Fixed-income investors may consider mutual fund (MF) alternatives such as equity savings funds (ESFs) and conservative hybrid funds (CHFs) to earn better returns with moderate risk.
'These funds can be partial alternatives to fixed income instruments in a falling interest rate environment, but not full substitutes. As rates fall, bond prices rise, boosting returns, and the small equity exposure adds a kicker,' says Chintan Haria,
principal – investment strategy, ICICI Prudential Asset
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