In which deposits do we get the more interest and which is better?

July 13th, 2010| In India.

Bank deposits:

The interest offered by the banks depends on the duration and it is generally from 5% to 8%. These are very useful for the people who want permanent properties. As the interest rates are increasing in the present world, it is better to take short term deposits than the long term deposits. If the deposit is for 10 years and the interest rate is 8%, then the increased rates of the interested wont be applicable for this people. We should show interest towards the short term deposits when the interest rates are less and when the interest rates are more, we should select the long term courses. As there will be increase in the interest rates, it is better to take select the one year deposit.

Company deposits:

There will be risk in these deposits as there won’t be government surety and insurance on the deposits. If we are ready for this risk, we will get more interest and the companies are giving more interests to attract the people. We should not get attracted toward these deposits and we should check the company details and track record before investing. The companies will try to reduce the interest rates by taking the deposits from the people instead of the loans. So these rates will be more than the bank deposits and will be less than the loan rates. We should select the less duration deposits even the companies are providing more interests.

Mutual fund date policies:

They give the profits or loss after investing in different money markets to the depositors. Generally the date funds will give more amount than the bank deposits. By observing the last three years date funds, we get the money up to 10.50% to 14.5%. The date funds had given this amount as the interest rates have decreased. This rate is generally less than the bank deposits. There won’t be any surety on this money. The returns depend on the interest rates. The returns are more when the interest rates are decreased and we should expect the same returns now as the interest rates are increasing. It is better to select the long term deposits than short term deposits but we should remember that there will be a risk. The monthly income plans are invested in the equities up to 20% and so we can get more returns. The date funds will have more utilities than the bank deposits.

Post office policies:

As the bank deposits are decreased, the post office policies had gained more importance in the two years. They are providing 7.5% on the deposits and 8% on the monthly income on the five year recurring deposit. The interest on the monthly income plan is up to 10.5% when it is deposited as recurring deposit. This is only the way to get the more interest without any risk and it is very difficult to get this amount when the interest rates are increased. So it is better to join in the MIS and do the amount as recurring deposit. There will be government surety and it is very good for the retired people.