Bank Fixed Deposits (FDs) have been the most preferred investment option for Indians since ages. But in the present scenario, FDs are no more regarded as an investment option when it comes to good returns.
After demonetisation, many banks have slashed the interest rates on fixed deposits that resulted in lower yields. Though a few non-banking financial companies offer higher interest rates than banks, people show less interest because of security reasons.
The below are the alternative investment options to make the most from your investments... Have a look!
1. Corporate Fixed Deposits
Corporate FDs are similar to bank FDs. Many corporate companies like Tata, Mahindra, Bajaj and Reliance etc., offer fixed deposit accounts with usually high interest (1-3%) than what banks offer. However, these are not secured as bank FDs, thus an individual must evaluate the company's past performance and financial position before investing.
2. Government Bonds
If you are willing for a diversified portfolio and long lock-in period, you can consider government bonds against bank FDs. However, the interest rates might be equal or differ at times when compared to bank FDs.
3. Debt Mutual Funds
With diverse secured investment options like corporate bonds, government securities and money market instruments, etc., debt mutual funds are treated as the best alternative to bank FDs. The interest earned on debt mutual funds is slightly higher than bank FDs.
4. Other Alternatives
You can also consider other investment instruments like Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), National Pension Scheme (NPS) and postal savings schemes that will yield returns up to 7.2% to 8.4%, which are more than bank deposits.
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