13 Jun 08 Friday the 13th Horror : Inflation Rate jumps to 8.75%
Looks like Friday the 13th is indeed unlucky for the Indian economy (to an extent the world economy as well). Inflation Rate in India has jumped to 8.75% as of May 31, 2008. This jump does not account for the increase in petroleum prices announced last week. The impact of that increase is yet to be felt. Leading Indian as well as global economists are of the view that the inflation rate in India might touch the double digit mark soon, sending the economy into a slump and the markets into a prolonged bear hug. With inflation rising close to the double digit mark, the real returns on fixed deposits are slowly turning negative. This means even at a return of close to 10% on FD’s investors would make a post tax loss when inflation is acounted for. This is really bad news!
15 Jun 07 Kotak offers Highest Fixed Deposit (FD) Interest Rate in India
Kotak Mahindra Bank has recently launched a new fixed deposit (FD) offering an interest rate of 10.5% for duration ranging between 1 year 1 day and 2 years. I recently opened a fixed deposit with Kotak Mahindra Bank (Chennai – Anna Salai Branch). The customer service was great and I was done with the formalities in less than 30 minutes. A week later I was informed that my account was open, through SMS and Email. Kotak Mahindra Bank also sent me a greeting card on my birthday. Hats off to the customer care that Kotak Mahindra Bank provides. Coming back to the interest rates for fixed deposits (term deposits), Kotak Mahindra Bank and tamilnadu merchantile bank both top the “highest interest rate offered” table. However Kotak Mahindra Bank offers 10.5% annualised whereas Tamilnadu merchantile bank offers 10.5% non annualised.
04 May 07 Highest Fixed Deposit Interest Rate
With the interest rates offered by Indian banks on fixed deposits crossing the double digit mark, I wanted to park a part of my savings in Fixed deposits. With Inflation in India falling and staying below the 6% mark, I feel there is not much scope for further hardening of interest rates. Hence I decided this is the right time to open a fixed deposit which is absolutely risk free (upto 1 lakh) since it is covered by DICGC. I wasn’t able to find a single source for getting the interest rates offered by various banks at a single place. After spending 2-3 hours researching on google and calling up banks for information, I found that ABN Amro is presently offering the highest interest rate for fixed deposits. They are offering 10.25% for a 188 day term deposit.
What suprised me was that many banks where offering an interest rate of just around 8.5% for the same fixed deposit. Since there is not much of a differentiation possible when it comes to fixed deposits with different banks, I started wondering who would open a fixed deposit with banks offering about 8.5% interest, when there is a player offering the same product/service, with not much tangible differentiation and is paying 10.25% interest, which is about 2% higher. It couldn’t be because they had no ABN Amro branch near their residence, because these people send their marketing agents to your house to fill up the forms and complete all the required formalities. The only reason I could think of was information barrier. Information is not reaching the people. Or can it be that people are so lazy that they wont even spend an hour researching about the interest rates offered by other banks, before they select a bank? I wonder!
For some strange reason, I just remembered the old adage, “KNOWLEDGE IS POWER and INFORMATION IS WEALTH”
I request readers to share their knowledge on fixed deposit interest rates offered by various banks and also about FMP yield through comments.
