Equity investors face ongoing challenges following the market peak on September 27, 2024. Major indices such as the Nifty 100 and Nifty Midcap 150 have declined by 3.8% and 1.2%, respectively, through February 26, 2026, based on Nifty data. The Nifty Smallcap 250 index has fared worse, dropping 12.8% over the same period. Performance remains subdued over the past eight months since June 27, 2025, with the Nifty 100 flat at 0%, the Midcap 150 up just 1.1%, and the Smallcap 250 down 9%.
Market Performance Snapshot
| Index | Since Sept 27, 2024 | Since June 27, 2025 |
|---|---|---|
| Nifty 100 | -3.80% | 0% |
| Midcap 150 | -1.20% | 1.1% |
| Smallcap 250 | -12.80% | -9% |
In contrast, fixed deposit (FD) investors enjoy steady growth despite recent bank rate cuts tied to Reserve Bank of India repo adjustments. Numerous banks and small finance banks continue to provide competitive rates between 7% and 7.9%.
Top FD Rates from PSU Banks
| Bank Name | Highest FD Rate (%) | Tenure (Highest Slab) |
|---|---|---|
| Punjab & Sind Bank | 6.75 | 666 days |
| Bank of India | 6.7 | 450 days – Star Swarnim |
| Bank of Maharashtra | 6.65 | 400 days |
| Indian Overseas Bank | 6.6 | 444 days |
| Punjab National Bank | 6.6 | 444 days |
| Union Bank of India | 6.6 | 444 days |
| Canara Bank | 6.5 | 555 days |
| Central Bank of India | 6.5 | 2222 days; 3333 days |
| Bank of Baroda | 6.45 | 444 days – BoB Square Drive Deposit Scheme |
| Indian Bank | 6.45 | 444 days |
| State Bank of India | 6.45 | 444 days – Amrit Vrishti |
Leading Private Bank FD Rates
| Bank Name | Highest FD Rate (%) | Tenure (Highest Slab) |
|---|---|---|
| SBM Bank India | 7.85 | 391 days to 15 months |
| Jammu & Kashmir Bank | 7.25 | 888 days |
| Bandhan Bank | 7.2 | 2 years to less than 3 years |
| RBL Bank | 7.2 | 18 months to 3 years |
| DCB Bank | 7.15 | 60 months to 61 months |
| Tamilnad Mercantile Bank | 7.1 | 456 days (TMB456) |
| City Union Bank | 7 | 500 days |
| CSB Bank | 7 | 13 months |
| IDFC FIRST Bank | 7 | 450 days to 5 years |
| IndusInd Bank | 7 | 1 year 6 months to less than 1 year 7 months |
| YES Bank | 7 | 18 months 1 day to less than 5 years |
| Kotak Mahindra Bank | 6.7 | 15 months to less than 3 years |
| Federal Bank | 6.7 | 36 months |
| Karnataka Bank | 6.65 | 555 days |
| DBS Bank | 6.6 | 376 days to 600 days |
| South Indian Bank | 6.6 | 2 years |
| ICICI Bank | 6.5 | 3 years 1 day to 10 years |
| IDBI Bank | 6.5 | Above 2 years to less than 3 years |
| Axis Bank | 6.45 | 15 months to 10 years |
| HDFC Bank | 6.45 | 18 months to 3 years |
Top Small Finance Bank FD Rates
| Bank Name | Highest FD Rate (%) | Tenure (Highest Slab) |
|---|---|---|
| Suryoday Small Finance Bank | 7.9 | 5 years |
| Jana Small Finance Bank | 7.77 | Above 3 years to 5 years |
| slice Small Finance Bank | 7.75 | 18 months 1 day to 18 months 2 days |
| ESAF Small Finance Bank | 7.6 | 444 days |
| Shivalik Small Finance Bank | 7.5 | 21 months 1 day to 22 months |
| Utkarsh Small Finance Bank | 7.5 | 2 years to 3 years |
| Ujjivan Small Finance Bank | 7.45 | 2 years |
| Equitas Small Finance Bank | 7.2 | 888 days |
| AU Small Finance Bank | 7.1 | 30 months 1 day to 36 months |
Psychological Advantages for FD Investors
FD investors hold a clear psychological edge during market declines. Vijay Kuppa, CEO of IncredMoney, notes that capital protection takes priority now. “In uncertain times, return of capital becomes more important than return on capital, and stability itself becomes a form of return,” Kuppa states.
Swapnil Aggarwal, director at VSRK Capital, highlights the comfort of guaranteed returns and insulation from volatility. “FD investors feel safer because returns are fixed and insulated from market volatility. They offer capital protection and predictable income, avoiding mark-to-market losses during corrections,” Aggarwal explains.
FD Rates Compete with Volatile Equities
Recent equity underperformance makes FD yields attractive, though experts urge long-term perspective. Kuppa observes, “A 1-year FD could deliver a 7% return with certainty, while equities have seen volatility and muted returns recently. However, FDs are not meant to outperform equities over full cycles.” He recommends high-quality corporate bonds as fixed-income options.
Sachin Jain, managing partner at Scripbox, emphasizes differing investor profiles. “FD and equity investors have different risk profiles. FD investors prefer predictable returns and capital safety. The perception of safety is a short-term effect of equity volatility; both asset classes serve different purposes,” Jain says.
Role of FDs in Diversified Portfolios
Market downturns underscore diversification benefits. FDs stabilize portfolios, ensure liquidity, and safeguard capital for short-term needs, Aggarwal states. Kuppa adds that they prevent forced equity sales during liquidity crunches. “A portfolio without fixed income lacks balance; asset allocation helps investors survive downturns,” he says.
Jain views downturns as temporary, with FDs offering predictability for rebalancing.
Balancing Equity and Fixed Income Long-Term
Long-term investors should prioritize disciplined allocation over timing. Jain advises against emotional moves, stressing patience for equity growth. Kuppa sees drawdowns as noise for those with extended horizons and recommends periodic rebalancing. “Rebalancing is discipline, panic selling is emotion. The key is to respond with structure, not react with fear,” he says.
Aggarwal regards corrections as buying opportunities. “Attempting to time the market often leads to missed opportunities during recoveries. Investors with a long-term horizon can use such phases to accumulate quality assets at relatively lower valuations,” he notes.
