As the interest rate on bank deposit continues to be subdued and real returns turn negative in the wake of rising inflation, the common Indian bank depositor has been left rueing a bitter harvest.
At stake is the future of a time-tested investment instrument that generation after generation of Indians used to keep their money in and generate fairly decent returns over time.
Bank fixed deposit (FD) rates have fallen from 8-10 percent per annum a few years ago to 5-7 percent per annum currently, says Jimmy Patel, MD & CEO, Quantum Mutual Fund. For most of India's senior citizens, FDs are the primary investment, and current rates are not viable because of paltry real returns, he adds.
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