Is it the right time to get FD in bank? Read Experts’ Advice

Fixed deposit latest news- Banks have started increasing FD rates. All this is happening because loans are going to get expensive. It has already started. Interest rates on FDs have been increased by HDFC and Bajaj Finance.

Read this news before making FD in bank

The increase in interest rates by the Bank of England is directly related to your pocket. Yes, this is not surprising, they say that a gesture is enough for the wise. So this is a sign that you will get more returns on your FD in 2022. Interest rates on bank deposits are also going to improve. The yield of bonds will also increase and all this because loans are going to get expensive. It has already started. Interest rates on FDs have been increased by HDFC and Bajaj Finance.

In fact, the printing of notes is going on around the world to give a vaccine for cheap loans to the economies broken due to Kovid. Cheap loans were distributed leaving more cash than needed, which hit the car of economic development. It also ignited the fire of inflation. So now the process of becoming costlier all over the world is just about to start. It has started in Europe. There has also been news from America that interest rates can be increased three times in 2022.

Market experts believe that in India also, the repo rate can be increased by the Reserve Bank next year. Repo rate is the rate at which banks get loans from RBI. Due to the increase in the repo rate, the loan becomes expensive and due to its decrease, the loan becomes cheaper. Repo rate is also directly related to interest rates of deposits.

To make the loan cheaper, the capital is your deposit… To give loans cheap, so the interest rates on FD, savings account are also reduced… Let us tell you that from May 2020, the Reserve Bank has retained the repo rate at 4 percent. The effect of this was that the country’s largest bank SBI, which was giving an interest of 6.10 percent on one year FD in January 2020… The current interest rate on this is at the level of 4.90. Which is less than the rate of retail inflation of about 5 percent.

According to Kirtan Shah, Founder and CEO, Credence Wealth Advisor, while investing in fixed income investments such as FDs, bonds and debt mutual funds, choose short-term investments over long tenures. Because the interest rate will increase gradually and interest gets locked in investments with long lock-in. Although Kirtan says that even after this, these options will be able to beat inflation, it will be a matter to be seen.

Money9’s advice-If Omicron’s risk increases, interest rate hikes may be delayed. Also keep in mind the rate of inflation while investing in any fixed option and keep a portion of debt or fixed income in the portfolio as per the requirement.

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