June 2018 Economic Times
More non-banking finance companies are likely to come with higher rates as they jostle to tap the retail money.This will also help those companies to expand retail reach, a key business driver for them.
More non-banking finance companies are likely to come with higher rates as they jostle to tap the retail money.This will also help those companies to expand retail reach, a key business driver for them.
Retail bonds are coming back to the market with investors showing encouraging response to quality papers. Shriram sounds a credible name among retail investors who have already tasted its corporate fixed deposits with no default record.
As interest rates are expected to rise, it makes sense for investors in the lower tax slabs to invest in fixed deposits maturing in one year. Investors will also get an opportunity to roll over their fixed deposits at a higher rate
Performance is dismal for income funds in the past one year. The value erosion is higher as these funds invest heavily in long maturity papers, which bled in past months.
Competitive interest rate increases by banks and non-banking finance companies across the spectrum has seen rate of return peak to its highest in about two-three years putting the smile back on savers.
The recall of perpetual bonds by financially crippled banks may have been a blessing for investors who would have had to bear losses if the banks had stopped paying interest.
While the rates offered are much higher than traditional bank deposits, the revised 7.75% norm too has helped add a new set of investors for these sovereign-like instruments with little risk of defaults
Tax-free bonds offering a return of 6.5 per cent are finding favour among rich investors. Stable taxfree returns and lower volatility compared to debt mutual funds are driving investors back to these bonds, traded only in the secondary markets.
Wealth managers believe that rise in bond yields over the last one month leading to better post tax returns, and profit booking in equities are driving investors to FMPs.