Key Points
Fixed deposits with small finance banks offer higher capital protection and income certainty than debt mutual funds..
Hence, depositors in small finance banks qualify for the quasi-sovereign guarantee cover offered through the Depositor Insurance Scheme of DICGC, an RBI subsidiary..
Thus, consumers can opt for high-yield FDs of small finance banks, especially if these are offered at higher interest rates for longer tenures..
Those with a slightly higher risk appetite can start investing in debt mutual funds once the trend of falling interest rates becomes clearly evident..
Debt funds, especially those with longer duration profiles, typically generate higher returns than bank FDs offered during a falling interest rate regime...
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