Bank fixed deposit interest rates have been falling since February, 2019, when the Reserve Bank of India (RBI) reduced the benchmark repo rate by 75 basis points continuously. Accordingly, all the banks too have been reducing interest rates they offer on their deposits, especially fixed deposits (FDs). However, the reduction in FD rates by banks has not been in sync with the fall in repo rates but slowly all major banks have reduced the interest rates of deposits. 

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While the banks are lowering rates on deposits, what should an investor do? Is it still a right choice to go for fixed deposits, or its time to shift your investments towards some other options available? 

Pankaj Mathpal, MD, Optima Money Manager told Zee Business Online, ''FD interest rates are declining due to RBI's rate cuts. The deposit rates remain flexible throughout the year as they are tend to change after RBI's MPC outcome, however as an investor one should only invest in FDs, if they are looking for safe and fixed income.''

Three things to do as an investor, when fixed deposit rates are falling:

1. Do not aim for long term with current interest rates: ''The investor often calculates the interest income, estimating it with same interest rates to meet his/her long term financial goals, which is not the right thing to do. The average interest rate should ideally be lesser than the present rate offered,'' added Mathpal. 

2. Consider other investment options:  Mathpal says that an investor should check if the amount is required between two and three years. If so he should go for FDs. But in case of more than 2 to 3 years, the investor should consider corporate bond funds or banking and PSU debt funds that have no credit risk. However, investors can also choose among various asset class like mutual funds, gold, bonds etc. 

3. Align investments with your financial goals: The investments should be aligned with your financial goal, if you are eyeing a return of over 10% or more, you can opt for mutual funds or debt funds as an investment. While if you want stable, fixed and safe investments, you can go for fixed deposits.