Time for "FDs" once again!!

With RBI taking measures to suck out liquidity out of the system, the banks have increased the lending rates . ( Definitely a bad news for the floating rate borrowers!).

The good news is that most of the banks are offering attractive interest rate on deposits. 9.5% p.a. interest is being offered by many banks .( Time period stipulated for such deposits varies from one bank to another).

Although the post inflation return seems to be meagre 3%, You can safely park some money in such deposits.

If you are in a higher income bracket FMP ( Fixed maturity plan ) offered by MFs may be a better option. If you have someone who is not working at home, you can make the deposits on their name to make your post tax return really attractive.

It will be interesting to see how the interest rates move after this month.

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