Bank FD Rates have peaked now. CRR down from 4.5% to 4%

[SSV]

RBI' MPC decided that CRR to be cut by 50 basis point from 4.5% to 4% ..
CRR= Cash Reserve Ratio .. ( the cash that need to be kept as a reserve which could not be available for lending )..

This redcution in CRR means the banks now have more funds ( liquidity) for lending from their deposits.. means Banks dont need to pay more interest to get more deposits..

Means: FD rates have peaked .. Book your FDs now for the maximum FD rate.. FD rates may go dwon in future..
An official Repo rate cut is on the cards for Feb meeting ...

All the best ..

 

[Arnal07]

I was talking about investment made today. Not 10 years before. Already said, we have to look for future not past. Markets gave returns between 2021-2024 mid only and that doesn't happen every 10 years. Overall returns of markets in last 15 years are CAGR at 11% only. Go deep with mathematics. How many actually invested before Covid? How many actually invested after 1 years of markets regained?

So we have to make a point looking at all things. Now many Mid, Small caps have came down 25-60% also. I gave you example: My friend having SIP of 10K per month started in June 2021 was sitting on around 50% profit or returns on invested cost. In last 6 months, investment equal to 14 months have eroded 40% and his returns averaging at 35.3%. So overall 10% per year and if markets go south in this or next quarter it will reduce it further bringing actual return less than FD. So Sun don't rise when you open your eyes. 90% of people have actually missed the upside.

After Covid crash trend was #MutualFundSahiNahiHai and most of people came out of it and returned at higher levels. Only 5-10% are those who actually started after 2021 and got returns but didn't got out at highs and now facing dowenside. This generation hasn't seen the phase of bear markets which when starts lasts 5-7 years where average market returns are 3-4% only. Wait for it.

In last 20years avg large cap mutual funds gave 12% cagr and small/midcap funds gave 16-18% cagr.
I am not talking about individual stocks.Mutual funds are not regular source of income, so you have to invest some amount in fixed assets for regular income.Since 2000, nifty never have 3-4% returns in a 4-5years phase.In current economic condition of India4-5 years long bear market in impossible.Market will correct price wise or time wise in the middle but in longer run Mutual funds return will surely beat FD by handsome margins.From dec, 2021 to April 2023 Nifty gave 0 return.This type of time correction will happen again but if you continue to do sip or invest for 8-10years you can get double the return of FD.

That's what US thought in 1929 and bubble burst. Then between 1939-1945. Then between 1965-81. That's what people thought during 2004-2007. That's what people thought in 2012-13 and that's what people are thinking now from 2021-2025. But every generation will see the wrath of markets. What will you do when you need the money and you are stuck with longer term view just because you couldn't anticipate short term profit booking?

The word impossible is nothing. In Nov 2019, people were like we will never be able to see Nifty below 10K mark ever. But we saw 7400. Pandemic may not hit but something new will come to drag it. This time during pandemic, drug lord money and those who were sitting with billions saved the market but it won't happen always. That's why I said, wait for it. People learn from few decades. I went into centuries to make a view. The 18th centruy recession in Europe was never thought of and it started with public health crisis. No one knew that so many people will lost life and even for labour for food, countries will have to beg to other countries.

Life is a circle. It keeps coming back to points where it started after complete rotation and then start a new rotation.

Then investing in FD will be better for you.Others who can take a bit risk will enjoy mid double digits return.

 

[desiviru]

In last 20years avg large cap mutual funds gave 12% cagr and small/midcap funds gave 16-18% cagr.
I am not talking about individual stocks.Mutual funds are not regular source of income, so you have to invest some amount in fixed assets for regular income.Since 2000, nifty never have 3-4% returns in a 4-5years phase.In current economic condition of India4-5 years long bear market in impossible.Market will correct price wise or time wise in the middle but in longer run Mutual funds return will surely beat FD by handsome margins.From dec, 2021 to April 2023 Nifty gave 0 return.This type of time correction will happen again but if you continue to do sip or invest for 8-10years you can get double the return of FD.

Then investing in FD will be better for you.Others who can take a bit risk will enjoy mid double digits return.

Are you getting an idea from my comments that I am against investing in Equity Markets? Bro, I have made a fortune from markets. I started investing in 2004 when you may be learning a,b,c in school. You don't know about me because I refrain from boasting here and there. Started learning about markets in 1998 itself in teenage. Having 2 decades of experience in Markets. Have seens Ups and Downs and telling from my experience that those who say stay invested are foolish. I am of view that take out your money when your goals have reached no matter if has by investing lumpsum in 6 months. Take it out and enjoy. I took complete exit between Aug-Sep from all Equity and MF portfolios and see in last 6 mpnths I have saved myself from erosion of 30-40% of my value and in those months earning from banks which adding to my value. Now will start reinvesting if budget gives a shiny picture else you will continue to see fall till 1st Qtr 25-26.

Whole FD comment were based for Senior Citizens and SCSS as the person asked about SCSS scheme. Are these for a kid like you? Then why are you getting offended?

 

[Arnal07]

Are you getting an idea from my comments that I am against investing in Equity Markets? Bro, I have made a fortune from markets. I started investing in 2004 when you may be learning a,b,c in school. You don't know about me because I refrain from boasting here and there. Started learning about markets in 1998 itself in teenage. Having 2 decades of experience in Markets. Have seens Ups and Downs and telling from my experience that those who say stay invested are foolish. I am of view that take out your money when your goals have reached no matter if has by investing lumpsum in 6 months. Take it out and enjoy. I took complete exit between Aug-Sep from all Equity and MF portfolios and see in last 6 mpnths I have saved myself from erosion of 30-40% of my value and in those months earning from banks which adding to my value. Now will start reinvesting if budget gives a shiny picture else you will continue to see fall till 1st Qtr 25-26.

Whole FD comment were based for Senior Citizens and SCSS as the person asked about SCSS scheme. Are these for a kid like you? Then why are you getting offended?

How old are you?
I don't know what equity investment are you talking about, but I invested lumpsum in june,2024 and aug,2024 in few mutual funds and I am already in 5% profit.

 

[desiviru]

How old are you?
I don't know what equity investment are you talking about, but I invested lumpsum in june,2024 and aug,2024 in few mutual funds and I am already in 5% profit.

Wait till you see that going -11% in next 1 year. You will run for your money and it will never come back to you. MFs have no guaranteed return i,.e why keep 60% in Fixed assets like FDs, bonds, gold etc. while rest 25% in MFs and 10% in direct equity. Here equity means stocks investing and trading (both stocks and FnOs).

As you said, you started in 2024 then you will learn over next 10 years. The markets topped out in Septemeber, 2024 and are on downward trend. Markets are not easy game. It may look. MFs are fooling people by selling with lies that it is more safer than direct investing. I had Aditya Birla MF with investment 4.7L accumulated over years in SIPs. In Dec 2019 it was having 23% gain but after market crash it was -40% down from my prinicipal. I waited and once my own prinicipal came, I got out. Most MF invest 75% tp 80% in direct equity i.e stocks. So fall in that decrease MF NAV. Some follow 50-50 ratio i.e 50% in Equity and 50% in debt but those give lower returns. Risk is high so is the reward.

I am telling you if you didn't invested between 2020-2023, this is not the time to enter but to exit. A 10% more correction is on the cards.

 

[brucelee]

How old are you?
I don't know what equity investment are you talking about, but I invested lumpsum in june,2024 and aug,2024 in few mutual funds and I am already in 5% profit.

Any product that has a big marketing budget (#mutualfundssahihe ads) has to be dealt with extreme caution and take conscious decision when to enter and exit, otherwise you will just be in the cattle class.

 

[Arnal07]

Wait till you see that going -11% in next 1 year. You will run for your money and it will never come back to you. MFs have no guaranteed return i,.e why keep 60% in Fixed assets like FDs, bonds, gold etc. while rest 25% in MFs and 10% in direct equity. Here equity means stocks investing and trading (both stocks and FnOs).

As you said, you started in 2024 then you will learn over next 10 years. The markets topped out in Septemeber, 2024 and are on downward trend. Markets are not easy game. It may look. MFs are fooling people by selling with lies that it is more safer than direct investing. I had Aditya Birla MF with investment 4.7L accumulated over years in SIPs. In Dec 2019 it was having 23% gain but after market crash it was -40% down from my prinicipal. I waited and once my own prinicipal came, I got out. Most MF invest 75% tp 80% in direct equity i.e stocks. So fall in that decrease MF NAV. Some follow 50-50 ratio i.e 50% in Equity and 50% in debt but those give lower returns. Risk is high so is the reward.

I am telling you if you didn't invested between 2020-2023, this is not the time to enter but to exit. A 10% more correction is on the cards.

I have not started in 2024, I am in stock market for last 5years. I just did two lumpsum on june and aug 2024 in a separate Mutual fund account.
I am taking screen shot of your comment and will post after one year and see how my investment goes in -11% in one year😭.
If market corrects then it will be another opportunity to invest.
[I don't invest in hybrid funds, for mutual funds only equity funds]

 

[ramirami]

 

[Arnal07]

View attachment 79823

explain plz sir

 

[desiviru]

I have not started in 2024, I am in stock market for last 5years. I just did two lumpsum on june and aug 2024 in a separate Mutual fund account.
I am taking screen shot of your comment and will post after one year and see how my investment goes in -11% in one year😭.
If market corrects then it will be another opportunity to invest.
[I don't invest in hybrid funds, for mutual funds only equity funds]

Okay see you in June then. if you will be able to have your principal intact for same lumpsum you did.

5 years and writing and asking for explanation of a graph above tells a different story about you, kiddo. Don't get offended at everything. That's not a good way to learn in life. Time teaches everyone. You will get the dark side soon. Remember in life, only 5% people in markets have made something out of it because they followed their own vision, made their own set of rules rather than seeing charts, believing others, believing media etc. and influecers. These were not that active in our times. Depend and believe in yourself.

 

[Arnal07]

Okay see you in June then. if you will be able to have your principal intact for same lumpsum you did.

5 years and writing and asking for explanation of a graph above tells a different story about you, kiddo. Don't get offended at everything. That's not a good way to learn in life. Time teaches everyone. You will get the dark side soon. Remember in life, only 5% people in markets have made something out of it because they followed their own vision, made their own set of rules rather than seeing charts, believing others, believing media etc. and influecers. These were not that active in our times. Depend and believe in yourself.

It seems like you are the offended one.I certainly understood the 5year rolling return charts of sensex but wanted more explanation from the poster.
Also it seems you know every thing about market and never required any explanation from anywhere, that's why in the covid period you got out of your investment once the loss got recovered but I stayed invested.🥳😃

 

[desiviru]

Any product that has a big marketing budget (#mutualfundssahihe ads) has to be dealt with extreme caution and take conscious decision when to enter and exit, otherwise you will just be in the cattle class.

Actually people don't learn till they burn their hands in fire. One of my friend lost all of his savings over years believing such ads, his broker and others around him while I always tried to caution him but he said, you live your your approach and I will live with mine.

Same way my father's brokers always tried to influence him but I had his trading account during those days. He bad mouthed about me to my father and when I proved him wrong in 2011, I went to his office, lambasted him badly. Made him what he said and what could have happened if I didn't overturn his decisions. So invest with extra cuation. You can't just park you money anywhere and expect others to grow it. The stupid Gen Z will learn only after losing most of it like many people learnt in 2008. Euphorias always create in markets and when it is over, you are left with dust only. So keep consolidating with your positions and relook and rework strategy from time to time. Invest, take out half, take out another 25% if up, revinvest that only when you see opportunity. Don't just jump in seeing a small 10-15% correction.

Bear arket don't signal you in few months. It creates over years just like bull market lasting too long now. Law of averages have to come-in now.

 

[SSV]

RBI' MPC decided that CRR to be cut by 50 basis point from 4.5% to 4% ..
CRR= Cash Reserve Ratio .. ( the cash that need to be kept as a reserve which could not be available for lending )..

This redcution in CRR means the banks now have more funds ( liquidity) for lending from their deposits.. means Banks dont need to pay more interest to get more deposits..

Means: FD rates have peaked .. Book your FDs now for the maximum FD rate.. FD rates may go dwon in future..
An official Repo rate cut is on the cards for Feb meeting ...

All the best ..

Now that the US has reported a strong jobs report, the Fed may not go for rate cuts in the coming few months and in turn the RBI may not go for a rate cut in Feb meeting, means the status quo may be maintained in the coming few months regarding interest rates in India..

 

[desiviru]

Now that the US has reported a strong jobs report, the Fed may not go for rate cuts in the coming few months and in turn the RBI may not go for a rate cut in Feb meeting, means the status quo may be maintained in the coming few months regarding interest rates in India..

Yeah, I was watching bloomberg yesterday and yes the chance of FED going for further rate cut has lowered now. So RBI will let go rate cut this Feb but as they start flicking CRR, maybe 0.25% still in Feb is not completely off the cards. The retail prices of many things have started going down in last 3-4 days. If it continued till budget then room will open for rate cut citing inflation data.

 

[2025]

Back to the original Thread.
1. PPF is better than FDs in most cases (yearly investment limit 1.5L per person), particularly, if you fall in the tax bracket 20%+ (liquidity is an issue for initial 5 years).

2. SCSS is best option for senior citizen, more so if they fall lower or zero tax bracket. Interest get credited to your saving ac every quarter.

3. If u already hold PPF for more than 5 years and have already invested good amount. then you can withdraw partially every year (up to a certain limit). For example, If you have a balance of 5 lakh+, then every year, you can invest up to 1.5L and can withdraw the same amount (even more) anytime. you don't have to pay any penalty or tax (unlike FDs).

4. While booking FDs, look for a few things: a. Bank's reputation (PSUs, and large privates are better), b. Interest rate (higher is better), c. Duration (longer is better), and d. Penalty for premature withdrawal (lower is better). If you have someone close within the family (prefer super senior citizen, senior citizen, female in that order) who don't have taxable income (excl. spouse & dependent child), then book FDs in their name to avoid tax outgo (if you don't fall zero tax category).

Current Rate: PPF: 7.1%; SCSS: 8.2%; FDs: Variable but usually 3 - 8%.