How to Keep Your Money Growing in a Volatile Market: A Comprehensive Guide

The Indian financial landscape in early 2025 has been quite unpredictable. According to Reuters, equity mutual fund inflows slumped to an 11-month low in March 2025 due to growing concerns around sectoral imbalances and global uncertainties. Simultaneously, the Reserve Bank of India (RBI) cut the repo rate by 25 basis points to 6.00%, marking the second consecutive rate cut aimed at cushioning the economy from external shocks and tariff threats.

Such conditions make it imperative to seek stable avenues for wealth preservation and growth. In this context, Fixed Deposits (FDs) and high-interest Savings Accounts—especially from institutions like Ujjivan Small Finance Bank—emerge as secure and rewarding options.

Why Capital Preservation Matters in Volatile Times

Market volatility can erode wealth quickly if investments are not adequately shielded. Preserving your principal while earning predictable returns should be the core objective during uncertain times.

Key Risks During Volatility:

• Stock market corrections
• Interest rate fluctuations
• Global economic instability

• Currency depreciation
   

  Thus, building a diversified yet conservative portfolio that includes fixed-income products is critical.

   

The Case for High-Interest Savings Accounts

Traditionally seen as a place for liquidity rather than growth, Savings Accounts have evolved significantly. Today, certain banks offer interest rates that rival short-term FDs, without locking up your funds.

Ujjivan SFB's High-Interest Savings Account

One of the standout products in this space is Ujjivan Small Finance Bank’s high-interest Savings Account, which offers:

• Up to 7.50% p.a. for balances above ₹25 lakhs
• 7.25% p.a. for balances between ₹5 lakhs and ₹25 lakhs
• 5.00% p.a. for ₹1 lakh to ₹5 lakhs
• 3.25% p.a. for up to ₹1 lakh
   

Other Features:

• Quarterly interest pay-outs
• No premature withdrawal penalties
• Easy online access via net/mobile banking
• Insurance coverage up to ₹5 lakhs under DICGC
   

Advantages Over Regular Savings Accounts

• Better yield on idle funds
• No need to time the market
• Great for emergency or short-term savings

Why Fixed Deposits Still Hold Value

While Savings Accounts provide liquidity, FDs offer stable returns over a fixed tenure, making them ideal for conservative investors.

Benefits of FDs

• Guaranteed returns and higher interest rates
• Suitable for short- and long-term goals
• Loan facility against FD
• Senior citizen interest rate benefits

How to Use Both Together: A Balanced Strategy

Instead of choosing one over the other, consider using both Savings Accounts and FDs strategically.
 

Option 1: The Laddering Approach

• Keep 3-6 months of expenses in a high-interest Savings Account
• Divide the rest across FDs of varying tenures (6 months, 1 year, 2 years)
   

Option 2: Goal-Based Allocation

• Use FDs for planned expenses like education, weddings, or house down payments
• Use Savings Account for emergency fund and short-term liquidity
   

Option 3: Income + Growth Strategy

• Keep retirement corpus in a combination of Savings and Monthly Income FDs

How to Maximize Growth During Market Volatility

1. Automate Your Savings

   Set up automatic transfers to your Savings Account to ensure discipline.

2. Reinvest FD Maturities Smartly

   Instead of withdrawing FD returns, reinvest at current higher rates if applicable.

3. Monitor RBI Policies

   Interest rates on both FDs and Savings Accounts are influenced by RBI decisions. Stay updated to make timely adjustments.

4. Avoid Locking All Funds

   Keep some funds in liquid instruments like high-interest Savings Accounts to remain agile.