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If you're losing FPS, set all of your graphics to minimal settings, sound to minimal settings.
Shrink down your resolution. If not 1080p, then go to 720p, or worse, 480p :P
Make sure your Fraps records at the same FPS as your in-game FPS settings (not sure if and how this would help, but that's what someone told me some time ago and I just went with it).
AFAIK, free versions of recording programs automatically record at lower resolutions.
Graphics card, RAM, CPU all matter for high-quality recording. I don't use Bandicam, but I do use the full version of Fraps. All recordings are saved completely uncompressed. My 1-minute videos are all 2 GB and above. I currently have about 750 GB of D3 gameplay videos sitting on one of my external hard drives.
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