Why FDs Made Sense — And Why the Calculus Has Shifted
When FD rates peaked at 7.5–8.5% in 2023–2024, a high-credit-rating bank FD delivered near-comparable nominal yield to commercial real estate — with zero illiquidity risk and no management overhead. Many Ahmedabad HNIs rationally parked capital in FDs during that window.
That window is closing. As the RBI's 2025–2026 easing cycle progresses, SBI's 3-year FD rate has retreated to 6.7% (June 2026). Post-tax return for an investor in the 30% bracket is approximately 4.7% — below inflation in a meaningful way. Real returns on FDs are effectively negative for peak-rate investors who rolled over to current rates.
The Commercial Property Yield Stack in Ahmedabad
PIKORUA tracks active commercial transactions across Prahladnagar, CG Road, SG Highway, and GIFT City. Current gross yields on preleased Grade-A office range from 6.2% (GIFT City — premium location discount) to 8.1% (Prahladnagar Road — deepest tenant pool). After 10% TDS deduction and maintenance charges, net yield sits at 5.5–7.0% — comparable to an FD's gross yield.
The structural advantage of commercial property is what happens in year 3 and year 6: standard lease structures in Ahmedabad include 10–15% rent escalation clauses every 33 months. A property bought at 7% yield today escalates to an effective 8.05% yield in year 3 on the same purchase price — while an FD rolled over at market rates may see the inverse.
Add 6–8% annual capital appreciation in prime Ahmedabad corridors, and the 10-year total return on commercial property (yield + appreciation, compounded) comfortably outperforms an FD by 8–12% cumulatively. The cost: illiquidity and active management requirements.
Who Should Choose Which
FD remains the right choice for: capital with a defined deployment date within 12–36 months; investors who cannot absorb tenant vacancy risk; NRIs who want passive, hassle-free India exposure without property management complexity.
Commercial property wins for: investors with ₹75L+ available without near-term liquidity needs; HNIs in the 30% tax bracket seeking depreciation benefits; investors who want Ahmedabad market exposure without the residential price premium; NRIs seeking FEMA-compliant India income with professional management.
PIKORUA's advisory model includes tenant sourcing, lease management, and exit planning — eliminating the management overhead that often makes commercial property unattractive to busy investors.
