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The Life Savers Called Online FDs


wealthymattersThe one good think about fixed deposits is the absolute predictability of returns, as long as they are not closed prematurely. Add to this that unlike a lot of other fixed income instruments, fixed deposits are available for all tenures upto 10 years, and you can now use fixed deposits to design your own financial products.

The only drawback is the extremely low deposit insurance  in India.The Deposit Insurance and Credit Guarantee Corporation provides insurance to each customer of a Scheduled Bank for deposits up to Rs 1 lakh in case of  bank failure. This limit is applicable across all the deposits, including savings, current, fixed and recurring. This limit remains Rs 1 lakh even if the sum of all deposits (including accrued interest) exceeds the same. Worse, non-scheduled banks ,companies and other institutions offering fixed deposits don’t provide this small comfort either. Of of what use is predictability of returns if basic security and return of capital is not guaranteed ? Read more of this post

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Kenneth Andrade Shares A Trend @KotakSecurities #KotakMidCapMeet15


wealthymattersKenneth Andrade holds that India is transiting from a high to low interest rate economy.

This confirms my belief since late 2007.

This interests all those of us on a long term, multi-decadal/ multi-generational wealth-building journey.

We need to focus on locking in prevailing higher rates on fixed income instruments for as long as possible. Or construct such instruments for ourselves.

There will be spikes in interest rates in future, but at the end of each cycle, interest rates will keep trending lower.

A Kenneth Andrade Tip @KotakSecurities #KotakMidCapMeet15


wealthymattersKenneth Andrade has a hunch that the banking cycle recovery will be prolonged this time, compared to the previous two cycles.

This is significant to all the fixed income investors following wealthymatters. Don’t lend your money cheaply. And don’t gamble on yields with wrong expectations.

Where To Invest In 2014


wealthymatters

Investing in NCDs


wealthymatters.comA non-convertible debenture is a fixed income instrument where the issuer agrees to pay a fixed rate of interest to the investor. An NCD cannot be converted into equity of the issuing company unlike convertible debentures.NCDs are good substitutes for fixed deposits,especially company deposits.

Debentures are of two types secured and unsecured. The debentures with a “charge” on the assets of the issuer are called secured debentures. So in case of a default by the issuer, the secured debenture holders are paid by selling the assets against which the charge was created. Secured NCDs offer lower interest than their unsecured counterparts. Read more of this post

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