The decision of the Modi Govt to scrap all Rs 500 and Rs 1000 notes post 8 Nov 2016 has infused a lot of liquidity in the banking system as people have been queuing up to deposit the old currency notes.
A huge inflow of more than Rs. 5 Lakh Crores has come into the banking system and Major banks have drastically dropped their FD rates to 6.50% p.a. for 3 years FD. Post taxation this interest rate comes down to 4.55% p.a. and current long term inflation in India is around 7% p.a.
That means your money would grow at –2.45%p.a.!!
FIXED DEPOSITS ARE NO LONGER A GOOD INVESTMENT OPTION FOR US!
Where should one invest then?
We Indians traditionally prefer Safety and Security when it comes to long term investing. Hence, we have to find an alternate safe, secure way of investing which is also Tax Free.
As RBI gears up to announce its monetary policy soon, many of us know it will cut the interest rates, which will lead to Bond Yields dropping very fast.
So, as a prudent investor, if you want to book these high yields before they drop – for a long term of 10 to 15 years – the time to invest is NOW!
Credits: Samarth Wealth Management