Interest rates hiked - is this a good time to open a FD?

ozzy · Post by **ozzy** » Thu May 12, 2011 12:17 am

Hi all, The interest rates of most banks now are around 9% (for 2 - 3 years) compared to the 7% I checked several months ago. Is this a good time to put some money into a fixed deposit account? I have an account with SBI and they have an interest rate of 9.25% for 555 days and 1000 days. I'll be able to open the FD online as well which is great. I just want to know what you folks think about this. I'm not good at stocks, shares etc.. where I might get better returns but I can manage an FD. Thanks!

GutsyGibbon · Post by **GutsyGibbon** » Thu May 12, 2011 12:48 am

The rates are good indeed. Also consider filing FBAR if needed.
http://www.irs.gov/businesses/small/article/0,,id=148849,00.html

ozzy · Post by **ozzy** » Thu May 12, 2011 1:02 am

Thanks GutsyGibbon for the link. I've never heard of such a requirement from IRS. Well, better late than never!

ozzy · Post by **ozzy** » Thu May 12, 2011 10:01 pm

Anyone else? I just want to make sure I'm doing the right thing.

dcnri2india · Post by **dcnri2india** » Sat May 14, 2011 12:55 pm

Your question/post does not have enough information. Please provide your short term/long term goal against which this decision can be weighed against.

Cheers

ozzy · Post by **ozzy** » Tue May 17, 2011 9:11 pm

dcnri2india, I will not be needing the money at least the next 3 years and it's not much (2L INR). I'm planning to transfer some money to SBI and forget about it.

gwldaddu · Post by **gwldaddu** » Tue May 17, 2011 9:37 pm

9% is a good rate. But don't get over enthusiastic. Rates in India have been much higher in the past.

Of course, nothing can beat the original Indira Vikas Patras (double money in 5 years)..

Still, rates have been higher, and Inflation has been higher too..

So, current rates of 9% are good, but not something to be over-enthusiastic about

just my 2 cents...

oasis138 · Post by **oasis138** » Tue May 17, 2011 10:30 pm

gwldaddu;3890779% is a good rate. But don't get over enthusiastic. Rates in India have been much higher in the past.

Of course, nothing can beat the original Indira Vikas Patras (double money in 5 years)..

Still, rates have been higher, and Inflation has been higher too..

So, current rates of 9% are good, but not something to be over-enthusiastic about

just my 2 cents...

In real terms you actually loose money...sure 9% is great but what's inflation at 15 % ?

oasis138 · Post by **oasis138** » Tue May 17, 2011 10:31 pm

gwldaddu;389077

Of course, nothing can beat the original Indira Vikas Patras (double money in 5 years)..

.

I would like to know how much inflation compounded over that time frame ? If inflation was 15-17% a year for those 5 years the only thing one did with that patra was double its notional value.

gwldaddu · Post by **gwldaddu** » Tue May 17, 2011 11:33 pm

oasis138;389092I would like to know how much inflation compounded over that time frame ? If inflation was 15-17% a year for those 5 years the only thing one did with that patra was double its notional value.

I purchased my first Indira Vikas Patra in 1985.

I did a quick google search to see CPI in India in 1985. I see that it was well under 5%

http://www.inflation.eu/inflation-rates/india/historic-inflation/cpi-inflation-india-1985.aspx