Moneycontrol
Last Updated : Jul 13, 2018 04:05 PM IST | Source: Moneycontrol.com

Managing Money With Moneycontrol | 6 fixed interest rate instruments for low-risk investing

In this episode of Managing Money with Moneycontrol, we tell you how to go about your finances and which instrument to choose while making your investment in the debt market.

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Moneycontrol PF Team

There is an emerging interest rate scenario in India and globally. All of these are dependent on macros and also the micros. The increase in the crude oil prices that we have witnessed has led to an increase in the current account deficit which is putting pressure on the rupee and interest rates.

In this episode of Managing Money with Moneycontrol, we tell you how to go about your finances and which instrument to choose while making your investment in the debt market. In the accompanying video, Manoj Nagpal, Consulting Editor and Founder, Outlook Asia Capital, shares actionable insights on various options present in the financial market which can give you fixed interest rates.

Due to various global and local factors, interest rates are getting affected. The primary culprit here is the rising crude oil prices. This can be seen in the petrol prices going up but most importantly, due to this interest rates have also moved by about 1 percent.

When a retail investor looks to invest in a fixed interest instrument, he primarily has six different options to make investments:

Bank Fixed Deposits: Last years the rates were around 6-6.25 percent for a 1, 2 or 3-year fixed deposits which has now moved to around 7 percent. There is an increase of about  0.75 percent in the interest rates in bank fixed deposits.

Small Savings Instruments: Investment options which come under this purview are PPF, Post office Monthly Income Scheme, NSC. Here the rates have been fairly constant because these are Government controlled rates. The rates are around 7.3 percent and we expect as the time goes by, these will also increase in the future.

Company Fixed Deposits: The rates have increased to around 8.5-9 percent from the earlier years which were around 7-7.5 percent.

Non-Convertible Debenture: NCD's are non-convertible debenture of companies which can give you an interest rate of around 9 per cent.

Tax-Free Bonds: These options are for Hight Net worth Individuals (HNI) clients, which can give you an interest rate of around 6.25 to 6.3 percent.

Debt Funds or Fixed Maturity Plans: These two options come under the debt mutual fund category. Investors should look at these options if they fall under higher tax bracket.

To know more, watch the accompanying video present on the top.

(You can send in your queries to moneycontrolpf@nw18.com)
First Published on Jul 11, 2018 01:30 pm
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