Apr 2018 Economic Times
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.
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.
Wealth managers suggest investors keep in mind risks of investing in such bonds.