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Best Investment During a Volatile Market? Fixed Deposits Could Be It

July 12, 2025

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When the equity markets tumble, crypto takes a nosedive, and even gold shows inconsistent trends, Indian investors often turn to one of the most traditional instruments: Fixed Deposits (FDs). In a time when volatility is the norm, not the exception, the humble FD continues to offer what few others can—stability, safety, and assured returns.

But are FDs really the best investment choice during market turbulence in 2025? Let’s unpack the data, explore trends, and understand why this time-tested financial product remains relevant.

Volatility in 2025: A Snapshot

According to data from the NSE and BSE, the first quarter of 2025 saw the Nifty 50 index dip by over 6.2% amid global geopolitical tensions, oil price surges, and fears of a slowdown in the US and China. Meanwhile, cryptocurrencies lost over 12% in Q1 2025, wiping out gains made in late 2024.

Even traditionally "safe" assets like gold experienced price fluctuations of 4-6% within weeks, according to the India Bullion & Jewellers Association.

In contrast, Fixed Deposit interest rates in India, though undergoing a dip owing to the Reserve Bank of India’s (RBI) repo rate cut, has been quite consistent. For example, Ujjivan Small Finance Bank offers FD rates up to 7.75%* p.a. for regular depositors and 8.25%* p.a. for senior citizens. *T&C apply.

Why Fixed Deposits Make Sense During Market Turbulence

1. Capital Protection with Higher Returns

FDs are non-market linked, which means the principal and interest are unaffected by market dips. Whether the Sensex crashes or the rupee weakens, your FD amount remains safe and continues to earn a pre-agreed rate of interest. Additionally, with institutions like Ujjivan, you can earn higher interest on your FD investment.

2. Tax Benefits on 5-Year FDs

Section 80C of the Income Tax Act allows deductions of up to ₹1.5 lakh for investments in 5-year Tax Saving FDs—making them a dual-purpose tool for wealth preservation and tax planning. Please note that Tax Saving FD comes with a lock-in period of 5 years, prior to which withdrawal isn’t allowed.

3. Attractive Returns in 2025

Small Finance Banks (SFBs) like Ujjivan SFB are offering high-interest FDs. You can select from a range of FD products and select the one that fits your financial goals. These are risk-free returns, which in uncertain markets can sometimes outperform real returns from volatile instruments.

4. 100% Paperless Digital Fixed Deposit

You can now open a FD from the comfort of your couch, thanks to Digital Fixed Deposits. All you need to do is complete your Video KYC with PAN and Aadhar details. Please ensure that your Aadhar is linked to your registered mobile number. This is necessary for OPT (One-Time Password) verification.

5. Flexible Tenures and Overdraft Facility

FDs range from 7 days to 10 years (callable FDs), offering maximum flexibility. Additionally, in times of financial crunch, you can opt for overdraft against FD, without breaking the deposit—a smart way to stay liquid without touching your capital.

Final Thoughts

While Fixed Deposits might not offer the adrenaline rush of stock trading or the exponential gains of crypto, they deliver something arguably more valuable in uncertain times—peace of mind. In 2025’s volatile landscape, FDs emerge as financial anchors, helping Indian investors stay grounded while markets wobble. For investors seeking risk-free growth, capital security, and predictable income, FDs can indeed be the best investment bet right now.

Looking to grow your savings faster? Ujjivan SFB offers a wide range of fixed deposit products. Select the FD of your choice and take a step forward to your financial goals. Alternatively, you can browse through Ujjivan SFB product suite - our wide range of financial products are designed to make your financial life better.

Disclaimer:

The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.

Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by the you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user’s own risk. Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness for any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.

To know more about Ujjivan Small Finance Bank Products Visit:"https://www.ujjivansfb.in"

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to Ujjivan Small Finance Bank Limited or its licensors. Unauthorised use or misuse of any intellectual property, or other content displayed herein is strictly prohibited and the same is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person’s nationality, residence or otherwise) be contrary to law or registration or would subject Ujjivan Small Finance Bank Limited or its affiliates to any licensing or registration requirements.

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FAQs

1. Are FDs completely risk-free even in economic downturns?

While no investment is 100% risk-free, FDs in India are among the safest investments. Deposits up to ₹5 lakh are insured under DICGC, ensuring added security.

2. Can I break an FD prematurely during a crisis?

Premature withdrawal is allowed for callable FDs (FDs that don’t come with a lock-in period). However, you may lose out on the promised interest rate at the time of maturity and will be eligible for the applicable rate pertaining to the withdrawal date.

3. Should I invest in FDs even if I already have mutual funds or stocks?

FDs serve as a stabilizing component in your portfolio, especially useful for capital preservation and emergency funds. They balance out riskier investments and ensure part of your capital stays protected.

Best Investment During a Volatile Market? Fixed Deposits Could Be It

Volatility in 2025: A Snapshot