Hi,
My query is regarding the forecast of interest rates in India. I have few amount that i want to invest in FD's and just wanted to be sure about the tenure that I should select. Are we expecting more rate cuts in future and as per the past trends, when are we expecting the increase of rate of interest (I mean cycle for increase of rates). It seems that rates are already bottommed and we should not expect more rate cuts. If my understanding is correct then one should not invest for more than 3 years. Please advise
3 Answers
Hi,
Would like to understand about your investment strategy..May I know why would you like to invest in Fixed Deposits? What's is your investment objective?
If you believe that interest rates are bottomed out then is n't it that you would be investing in FDs at the low interest rate?
The last interest rate cut took interest rates in the country to the lowest level in five years.
If monsoon is good and if inflation comes down sub 5 % mark, we can expect some rate cuts in this fiscal. As of now, RBI is in wait n watch mode I believe.
If business environment / reforms improve, supply side can be good thus leading to low inflation levels.
If growth concerns worldwide continues, crude can stay at lower levels and can be beneficial to us. Every $10 per barrel fall in crude oil price can help to reduce retail inflation by 0.2%. So, if inflation comes down, rate cuts may happen.
Do share your views..
Hi Sreekanth, Thanks for the quick response. My query was basically for the investment of retirement fund of my father and we(me and my father) don't want to invest this fund in risky avenues. Our investment horizon is 3-5 years and we are not expecting regular returns from the investment that is why we don't intend to invest in postoffice schemes. Idea behind going ahead with FD's is to have capital security with some appreciation. I am already doing SIPs in mutual funds. As per your response, it seems we can expect some rate cuts (not before .50) in next 1-2 years depending upon inflation. Any forecast that we can predict after 2 years depending upon India's rate cycle in previous years. Also, considering our investment objective is there anything else that you can suggest apart from FD's?
Hi,
You may consider MF MIP funds, which are again primarily dependent on the interest rate scenario.
Kindly read below articles;
http://www.relakhs.com/best-monthly-income-plans-india-mutual-funds/
http://www.relakhs.com/best-arbitrage-funds-returns/
http://www.relakhs.com/top-best-balanced-mutual-funds-returns/
http://www.relakhs.com/list-of-best-investment-options-schemes-in-india/
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