Depositors deserve ‘real’istic interest rates
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Rising consumer inflation and falling nominal interest rates on bank deposits have led to low or negative returns for savers
Bank fixed deposits (FDs) are the only investment product people don’t think twice about before investing. They are considered the safest form of investment, ensuring that the tax-paid principal amounts are safe as many depositors are also regular taxpayers. FDs are also the most popular and trusted investment vehicle among senior citizens.
Worryingly, rising consumer inflation since June this fiscal (April and May figures not announced), combined with falling nominal interest rates on bank deposits as measured by the RBI’s Weighted Average Domestic Term Deposit Rate (WADTDR) has led to the real return on deposits turning negative or woefully low.