Use laddering strategy to average out returns, minimise reinvestment risk

Those keen to strike a balance between risk and reward may go for the barbell strategy

Fixed deposits (FDs) are offering attractive returns at present. SBM Bank is offering 8.25 percent for a deposit period of 3 years and 2 days.

RBL is offering 8.1 percent on 18- to 24-month deposits. Unity Small Finance Bank is offering as much as 9 per cent over 1,001 days.

Experts say while interest rates are at an all-time high, the party may end soon.

Says Anshul Gupta, co-founder and chief investment officer, Wint Wealth: "FD rates are close to the peak and are expected to go down a few quarters later." In short, this is the best time to get locked in at high interest rates.

Here are a few strategies that can help you derive the maximum benefits from FDs.

Barbell strategy

This strategy divides the investment portfolio into short-term and long-term FDs, with minimal investment in medium-tenure FDs.

Says M Barve, founder of MB Wealth Financial Solutions: "The barbell strategy says that the best way to strike a balance between risk and reward is to invest at the extremes of the risk spectrum." Gupta says investors who opt for this strategy can park their emergency funds in short-term FDs and lock in high-interest rates via long-term FDs.