New Delhi, Jan. 13 -- To understand the challenge facing conservative investors today, it helps to begin with the interest rate cycle. The Reserve Bank of India (RBI) is currently in an easing phase, aimed at supporting economic growth.

In 2025, the RBI cut the repo rate by a cumulative 125 basis points, bringing it down from 6.50% to 5.25%. This has pushed down AAA corporate bond yields to maturity (YTM) from around 8% to the 6-7% range.

With consumer price inflation (CPI) at a low 0.71%, further rate cuts in 2026 remain possible-potentially compressing yields even further and leaving conservative investors with limited options to earn meaningful returns.

Inflation reality

India's investor base remains far more skewed toward debt and...