Long term FDs

Most banks now offer 9.25% for FDs upto 5 years. For Senior citizens, the rate is upto 10%.

Considering the fact that I have not seen rates beyond these in the last 5 years, how many of you would consider this a good opportunity to lock in your capital for 5 years of assured return?

No doubt, equity has the potential to far outdo these returns, but for a consevative investor, this is as good as it gets IMHO. Anyone feels the rate will go even higher?

For a conservative Investor... would have preferred SBI Bond over FD... considering Cumulative Returns are almost 18.xx% per annum for senior citizen...think it is 17.85% for 'Non-seniors'.....!!!

SG

Thats a good option but not for an investor who has exhausted his tax saving limits. Also the period is 15 years. FD would offer better liquidity.

The key to this is will the interest rates go higher in the months to come?

Interest Rates are headed... Down definitely.... one see almost 2% drop atleast in this year......!!!

There are some very good quality Corporate Bonds....!!!

I would also seriously explore looking at E-Silver on National Spot Exchange....that would definitely outperform most assets...in the coming years...!!!

SG

Another good option is you can buy NHAI bonds over the exchange. They offer 8.25% tax free return (Currently trading at an yield of about 8%). It makes sense only if you fall in the tax slabs of 20% or 30%.

Pre tax returns equivalent are as below:
for tax slab 20% pretax return would be: 10%
for tax slab 30% pretax return would be: 11.43%

The benefit is the liquidity it provides you. You can sell it anytime on the exchange and get the benefit.

The NSE symbol is NHAI-N1.

You can look @ FMPs of 392 days or more for better Net of Tax returns.

Also if Interest Rates Go down ; Yield on Gilt Funds Go up.

You could also buy NHAI tax free bonds from the exchange if you fall in the tax slab of 20% plus. The pretax yield comes to about 10% or 11.43% (depending on your tax slab).

It also provides you liquidity as you can selll it on the exchange.

NSE symbol is NHAI-N1