![]() Investor’s money is locked till maturity. Investors don’t receive actual cash flow from FDs. This reserved capital can be utilized to supply closures (or pre-closures) in FD. The banks have to reserve a portion of capital received via FDs the entire capital can’t be lent. Banks have to maintain Cash Reserve Ratio(CRR) as per the regulations laid down by the central bank. Typically, FD rates are lower than that of other fixed investment options (such as bonds). Unfortunately, the present FD rate is approximately 5.4% (for a tenure of five years to ten years). During the year 1987, the FD rates were around 10%, and it was about 13% during the early 1990s. These instruments are offered by banks and non-banking financial organizations that return fixed interests. ![]() Traditionally, Fixed Deposit is the most popular investment among investors. Fixed-Income securities are instruments that payĪ fixed amount of interest every year till they mature.Ī few of the Fixed Income Securities are explained here. Let’s explore what the other popular Fixed Income Securities are. Hey, a fixed deposit is a good option, but not always. ![]() The “fixed deposit” is fixed in your mind. You work hard and save money, and when you need to invest, you go for Fixed Deposit most of the time.
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