Will the RBI Rate Cut Push Indians to Swap Fixed Deposits for Stock Market Investments?

In a Surprise Move, The Reserve Bank of India Announced A 50 Basis Point Reduction in the Repo Rate during the second bi-monthly mpc meeting on Friday, bringing the rate Down to a Three-5.5%, SINALING The regulator’s confidence in India’s overall sound macroeconomic condition.

With inflation Easing, The Central Bank has shifted its focus to revising growth, affirming that India’s growth story remains strong despite global uncertaintiies. This movie is expected to benefit both consumers and businesses, as lower costs will encourage boyers to spend more on big-twist items and encourage companies to pursue capital experties.

Rate Cuts May Encourage more Indians to Shift Towards Stock Investments: Experts

While the RBI’s Action May Benefit Borrows, It Block Impact Savers who Continue to relay on Traditional Investments Avenues Such as Such as Fixed Deposits to Park Their Savings for Risk-RISK-O

Traditionally, Indians have favored fixed deposits to beat inflation, although this trend has changed in recent years, especially after the covid-19 pandemic, when young individs began preferring investments in Stocks through the demat and mutual fund routes as a way to participate in India’s growth story.

However, Experts Believe That The RBI’s Total Cut of 100 Basis Points Since Februry May Further Encourage more Indians to Shift Their Investment Landscape from Fixed Deposits to Stock Investing.

Swapnil Aggarwal, Director of Vsrk Capital, Said, “The Reduction in Interest Rate Will IMPACT RETURNS on Fixed Deposits, which was attractive during the high-rate period. We expect an increase shift in investors to mutual funds, debt instruments, and other market-linked products. “

“This may result in renewed investments into the capital markets, which would improve liquidity and grow. Cycles in the economy, “Swapnil further added.

Vishal Goenka, Co-Founder of Indibonds.com, said, “a Balanced Policy Encouches Growth. Fixed Deposit Rates to come down sharply as banks transmit this rate cut. Investors Should Look AT 2-3-3-O3-Aayar Corporate bonds for their portfolio, as they continue to offer Good Spreads Over Government and FD Rates, and Interest Rates will come down more gradually for corporate bonds. “

Disclaimer, The views and recommendations giving in this article are that of individual analysts. These do not represent the views of Mint. We Advise Investors to Check With Certified Experts Before Taking Any Investments Decisions.