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Fixed deposits
Term deposits are arguably the best investment choice for regular clients and the elderly. Term deposits are well known for their flexible lifespan ranging from 7 days to 10 years and guaranteed returns. Speaking of flexible tenure, this is the safest investment that can be chosen in the short, medium and long term. Under the current low interest rate regime of the big banks, you may not want to invest in them, but some smaller funding banks may give higher returns than private and commercial banks offer. on their term deposit systems.
For one year term deposits there are small funding banks which currently give you an interest rate of up to 6.75% and are therefore also insured by DICGC up to Rs 5 lakhs. Speaking of 1 year term deposits, you can also invest in a term deposit system from private sector banks and post offices. In a post office term account, you can get an interest rate of 5.5% on 1 year deposits. On the other hand, private sector banks offer interest rates of up to 6.10% on 1-year term deposits. Here are the top 5 banks that are currently promising higher interest rates on 1 year term deposits.
Small financing banks | |||
---|---|---|---|
Banks | One-year FD rate for ordinary citizens | FD rates at 1 year for the elderly | Wef |
Utkarsh Small Financial Bank | 6.75% | 7.25% | July 1, 2021 |
Small Ujjivan Financial Bank | 6.50% | 7.00% | March 5, 2021 |
Small finance bank ESAF | 6.50% | 7.00% | May 2, 2021 |
Suryoday Small Finance Bank | 6.50% | 6.75% | June 21, 2021 |
Small Equitas Corporate Bank | 6.35% | 6.85% | June 1, 2021 |
Private sector banks | |||
Banks | One-year FD rate for ordinary citizens | FD rates at 1 year for the elderly | Wef |
RBL Bank | 6.10% | 6.60% | July 2, 2021 |
Yes Bank | 6.00% | 6.50% | June 3, 2021 |
IndusInd Bank | 6.00% | 6.50% | June 4, 2021 |
DCB Bank | 5.70% | 6.20% | May 15, 2021 |
Karur Vysia Bank | 5.25% | 5.75% | 08.07.2021 |
Recurring deposits
Recurring deposits work like fixed deposits, but the problem is that in fixed deposits you have to make a lump sum deposit and in recurring deposits you have to make a monthly contribution just like a mutual fund SIP. Recurring deposits are well known for their security, higher interest rates, and best for short term purposes. Investments in recurring deposits are highly preferred for risk averse investors who do not wish to welcome market-based returns into their portfolio.
The most benefit from an R&D program can be achieved if it remains invested throughout the term, as a premature withdrawal can lead to lower interest rates. In this scenario, doing mutual fund SIPs may be a decent choice. But if your only goal is to get risk-free returns in the short term, here are the major banks that are currently promising higher interest rates on recurring deposits.
Arbitrage mutual funds
For new investors or investors with a low appetite for risk, arbitrage mutual funds may be a good choice. These are the mutual funds that have their asset allocation in the cash and derivative markets to provide returns to the depositor. To maximize returns, it mainly exploits the price differences between current and future instruments. To take advantage of different prices, the fund managers of these hybrid funds buy and sell stocks in multiple markets simultaneously in order to generate returns.
Since the buying and selling prices of stocks are well known to the fund manager, arbitrage mutual funds tend to be less risky. Because they are equity funds, they are eligible for the same tax benefits as equity-based instruments. As a result, investing in arbitrage mutual funds for a year might be a good option for the tax advantages available for equity funds and reasonable average returns of 4-6%. Here are the 4 best performing arbitrage UCITS to invest in 2021, according to rating and returns.
Funds | 1 year returns | 3-year returns | 5-year returns | AT M | NAV as of July 7, 2021 | Evaluation by value search |
---|---|---|---|---|---|---|
Edelweiss Arbitration Fund | 4.38% | 5.98% | 6.32% | Rs 5,503 Cr | 15.97 rupees | 5 stars |
Nippon India Arbitrage Fund | 4.37% | 5.93% | 6.32% | Rs 11 792 Cr | Rs 22.14 | 5 stars |
L&T Arbitrage Opportunities Fund | 4.57% | 5.85% | 6.23% | Rs 4,488 Cr | Rs 15.80 | 4 stars |
Kotak Equity Arbitrage Fund | 4.44% | 5.80% | 6.15% | Rs 20 291 Cr | 30.71 rupees | 4 stars |
Term deposit at the post office
Just like a fixed deposit account of banks, it is a term deposit system provided by India Post. The post office term account has a maturity of 1 to 5 years. It is among the best and safest debt instruments for betting on short term goals because it is backed by the Indian government. In the Post Office’s term deposit account, interest rates are payable annually but are revised quarterly. Interest earned is added to your income and taxed according to your tax bracket. You can open a term account at the post office with a minimum amount of Rs 1000 and in multiples of Rs 100 without a maximum deposit limit.
A postal term account can be opened individually, jointly (up to 3 adults), or on behalf of minors. For the July to September 2021 quarter, the government recently kept interest rates unchanged for small savings plans. A one to three year postal term deposit will earn an interest rate of 5.5%. Whereas a 5 year deposit term will earn an annual interest rate of 6.7% per annum.
Debt mutual funds
Investors with a low appetite for risk, short-term goals and seeking stable income can invest in debt mutual funds. Debt funds are less turbulent and therefore less risky than equity funds, mid-cap funds and small-cap funds. Those looking to invest in market-linked instruments for less than a year can invest in low-maturity debt funds. Low duration debt mutual funds are funds that invest over a 6 to 12 month period in money market and debt instruments.
4 Best Debt Mutual Funds Highly Rated Better Than PPF
The reason you choose low-maturity debt funds is that these funds can offer a reasonable level of return for a modest level of risk for your short-term financial goal. But before investing in low maturity debt funds, investors should and should keep in mind various risks such as credit risk, interest rate risk, inflation risk, currency risk. reinvestment, etc. Here are the 5 best performing low maturity debt funds to invest in 2021, based on rating and yields.
Funds | 1 year returns | 3-year returns | 5-year returns | AT M | NAV as of July 7, 2021 | Evaluation by value search |
---|---|---|---|---|---|---|
Sun Life Aditya Birla Low Duration Fund | 5.45% | 8.05% | 7.94% | Rs 16,526 Cr | 559.73 rupees | 5 stars |
Kotak Short Term Fund | 5.41% | 8.02% | 8.16% | Rs 12 765 Cr | 2811.68 rupees | 5 stars |
JM Low Term Fund | 3.75% | 5.59% | 6.22% | Rs 128 Cr | 29.76 rupees | 5 stars |
Axis Treasury Advantage Fund | 4.79% | 7.62% | 7.56% | ⬠10,158 | Rs 2512.31 | 4 stars |
Low duration HDFC backgrounds | 5.99% | 7.82% | 7.73% | Rs 24 543 Cr | Rs 48.27 | 4 stars |
Warning
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