Wednesday, March 1, 2023

Have you examined the credit rating?

Fixed deposit, have you examined the credit rating?

The interest rate of fixed deposits has increased in the investment market. There are very few self-interested investors in our country. We are sure that a large section of savings banks will believe in term deposits. Oh man, oh man, and many others undoubtedly want to invest in deposits. Naturally, the average (or conservative) investor seeks higher interest rates. Due to the rush of banks, NBFCs, and corporate deposit schemes, investor enthusiasm is visible everywhere. Banking regulator Reserve Bank of India's change in repo rate will lead to a huge increase in interest rates. This change has been made in view of rising inflation.

It's a one-sided thing. Now read my words carefully. think about it. Today I highlight two things for you. One, the inflation you mentioned is one of the enemies of fixed depositors. Second, the interest earned on the deposit is taxed on you.

Let me clarify let's take the second issue first. Your overall income will be increased by the interest gained. Thus, remember to include interest income when calculating your earnings at the end of the year. The question now is how much is left in your hand after paying taxes? If you are happy to pay taxes, there is nothing to say. But remember this at all I remember this every time.

Now we come to the first topic. It goes without saying that inflation is a very destructive investment. So it is your responsibility to understand what "inflation-adjusted return" actually is. Generally, as a depositor, one should look for a realistic result after accounting for taxes and inflation. I would say that when the general public of our country invests in deposits, they should be aware of the soundness of the project (and the predictability of the promised returns). Read the ratings carefully, otherwise, you might be tempted by good prices. This situation is not desirable. If you get a reliable promoter (especially for corporate projects), you can move on.

So to get an idea about the deposit scheme at a glance, here are a few things you should look out for:

#Credit rating Dihal Gayle or

# Credibility of the promoter of the institution

# What is the interest rate?

# Impact of inflation and income tax

Before I conclude with words, let me highlight another important point. Check how much-fixed deposits make up your total benefits. If you feel that you are overinvested in deposits in the current scenario, and can spend more time in other types of assets depending on your risk profile, consider rebalancing. Maybe it will be fine in the end

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