The State Bank’s decision of raising deposit rates has put investors in fix, as at this time everyone was expecting interest rates to come down. Thats why investors are asking the questions that should they wait for further increase in rates , etc.
Here is some information which can help investors in taking decision.
– FIXED DEPOSITS: Interest rate on fixed deposits are now almost same for tenure of 1-2 years and for 3-4 years. So people are going for short term fixed deposits as they are giving higher returns with early maturity but according to experts investors who can lock in their money and do not require them in near future, should invest in long term fixed deposits rather than short term.
-SHORT TERM BOND FUNDS: Short term bond funds and fixed maturity plans can be attractive options.If you have money lying idle in your savings bank account, you may consider these into a liquid fund or ultra short term fund.
-LONG TERM DEBT FUNDS: The decision making could be more complex in case of long term debt funds.If you are investment savvy, you can even look at putting your money in all the debt instruments. Investing in long-dated gilt funds is another option that must be explored.