Parking our hard earned money in bank fixed deposits is the preferred option for many of us. We are more comfortable with it as we believe that our principal is not at risk and on maturity, we will get it back along with interest. While borrowers are happy when interest rates go down, the investors, especially those who depend on interest income as their primary source of income, become worried as they now earn lesser on their deposits placed with banks.
At such times, while a few investors consider taking higher risks to compensate for the lower yield, many continue with their fixed deposits. They either do not know about the alternatives or are just too risk-averse. It is important for these people to know that there are other avenues that can provide similar (to fixed deposits) if not higher returns without taking on significantly more risk.
