One should always consider investing in fixed deposits schemes as they are one of the essential component of an optimum portfolio. One can also consider investing in other debt instruments if not fixed deposits.
Fixed deposits guarantee a fixed return on investments just like bonds. Interest from FD’s attract a TDS. At the moment one can also consider investing in tax free bonds like IRFC.
Should one invest in FD’s right now?
Yes, one can consider investing in fixed deposits right now as the interest rates are quite high.
- Stock markets performed poorly in 2013 with benchmark index NIFTY giving just 6% returns. So looking at the equity markets performance one should consider investing in FD’s if you haven’t yet considered it.
- Returns from stock markets are highly dependent on FED’s QE tapering decision and the outcome of Indian Elections. Till then the markets look very volatile.
- Food prices are easing down off-lately leading to decrease in inflation. With this RBI will shift focus to growth by easing interest rates in the economy which will give a boost to growth. Many analysts anticipate a decline in the interest rate this fiscal.
Looking at this it makes sense to invest in fixed deposits right now..
You might also be interested in reading the Indian Wealth Report 2013.
What’s your take on it?
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