Is Fixed Deposit a good investment?
Interest rate can be classified as Nominal interest rate and Real interest rate. Nominal is what we see in Bank and Real interest is inflation adjusted interest rate (say, FD rate- CPI).
Even though we tend to see only nominal interest rate, what really matters is real interest rate which actually measures buying power of the return. Now inflation is fluctuating around 2%. This means real interest rate is actually 4.25%. (During 2010, 11 we had negative real interest rate). You may not believe but this is highest real interest in last 10 years.
Other things are demand supply equation as Sunil mentioned. Supply of money suddenly increased after demonitisation. For economic growth to happen, money should circulate. That can happen when people/corporates borrow and spend. To encourage that, lending rates will be low and as an effect FD rates will also have to be low.
Again..making money will be more effective when it is invested rather than saved.