As of May 2026, investors will now favour conservative investments due to a shift in the savings-inflation relationship. Historically low inflation and stable interest rates will make fixed deposits (FDs) a desirable low-risk investment for many investors again.
By keeping the interest rate at or around 10%, the Bangladesh Bank has provided savers with an opportunity for significant “real returns”, which are typically considered to be the result of the changes in inflation and therefore affect the total returns on the deposit.
What is Real Return?
The real return is a straightforward, yet enormously helpful, idea. For example, if your investment in the form of an FD pays you a 7% per annum interest rate and inflation is running at roughly 1.3%, then your real rate of return is 5.7%. This means you earn interest on your investment as well as gain additional purchasing power through your investment.
Over the years, there have been periods of high inflation where savings interest rates did not keep up with inflation, which meant that no matter the rate of return, your savings do not maintain their value due to the decline in the purchasing power of your savings; hence, the only viable way to grow your wealth with interest-generating assets is to invest in FDs at reasonable rates.
With current low levels of inflation and generally lower-than-average returns from fixed income, even relatively low fixed-rate FD returns look very attractive.
For those investors who have lower risk tolerances, FDs offer a unique opportunity to create wealth without assuming risk due to market volatility.
Why Fixed Deposits Stand Out Right Now
Fixed deposits do have some obvious advantages in that they are predictable. For example, FDs yield fixed returns unlike equities and mutual funds, allowing you to anticipate how much you will receive at the maturity of your fixed deposit account.
Locked-in Rate Advantage
When you invest in a fixed deposit today, you secure current interest rates for the entire term, as rates will likely decline over the next few years, according to most analysts.
Fixed Deposit Ladder Strategy
You can divide your investment between fixed deposits with differing maturity dates to add liquidity to your fixed deposits while still providing you with fixed returns.
Comparing with Other Safe Options
Although there may be slightly better yielding alternative investments, such as government bonds or State Development Loans (SDL), for some people, they are typically complicated and often longer-term locked-in investment options than Fixed Deposits (FDs), which are simply easy investments that people find widely available and trustworthy. Moreover, FDs offer very little opportunity for aggressive capital growth but are well-suited for people who prefer to protect their capital.
Discover More Stories Worth Your Time
Find How To Apply Stipend?
Explore the extended deadline and steps for eligible families to apply online.
Explore Will Eid Need Imports?
Discover how 12.3 million animals ensure local supply and benefits for online buyers.
Check When Gas Supply Returns?
Explore the latest Titas repair update affecting Gulshan and Banani today.
See Will School Fees Drop?
Discover how tax waivers on electric buses could impact transport costs for parents.
Learn Who Can Go Hajj?
Discover new 2026 rules, age limits, and key passport and vaccine requirements.
The Current Economic Environment
We are seeing a once-in-a-lifetime event in the economy where we have low inflation and stable interest rates currently co-existing in the economy. Because of that, you can expect to see fixed deposits produce a much higher rate of return than usual over the next few years. For conservative investors, retirees, or any other individual wishing to maintain their wealth while providing themselves with a steady income, this would be one of the best times in a long time to invest in FDs.
As always, be sure to have a clear strategy when investing in FDs by selecting the correct tenure for your investment, diversifying your FD portfolio appropriately, and locking in your FD rates before the opportunity expires.
