INSUBCONTINENT EXCLUSIVE:
Mumbai: Investors who are big savers in corporate fixed deposits are in for some disappointment
While Bajaj Finance will reduce its rates by 25-40 basis points (bps) in the first week of March, Mahindra Finance and PNB Housing Finance
have already reduced their deposit rates by 15-45 bps earlier this month.
A basis point is a hundredth of a percentage point.
After the
reduction, Bajaj Finance will pay a maximum rate of 7.80 per cent, while Mahindra Finance will pay 8.1 per cent and PNB Housing Finance will
Senior citizens could earn an extra 25 bps
This is in line with the overall reduction in deposit rates led by SBI, which now pays a maximum of 6 per cent
vice-president, investments, Bajaj Capital.
Mittal said investors looking for absolute safety could also consider the 7.75 per cent
Government of India bonds, where rates have not fallen yet
However, they must buy these keeping in mind their liquidity requirement as these bonds have a lock-in period of seven years.
While deposits
will work for those whose income is not taxable or are in the marginal tax bracket, financial planners believe investors in the highest tax
bracket should look at debt mutual funds
investors in the high tax bracket, banking and PSU debt funds and corporate debt funds work well as they can get the benefit of indexation
He believes investors can earn 7-8 per cent returns from these funds if they hold it for three years and above.