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Investors must look at credit quality while choosing corporate FDs

Stick to deposits of firms with high rating

investment, investors, savings, mf, funding, tech, economy, gdp, aif, alternative investment fund, capital, startups, tech, savings, money, cash, shares, funds, equity

Avoid locking yourself in instruments of above 12-24-month tenure

Sanjay Kumar Singh
Conservative retail investors and senior citizens find themselves in a predicament in today’s low interest-rate environment. For instance, at 6.25 per cent, the interest rate on HDFC’s 66-month fixed deposit (FD) is at a 43-year low, according to media reports.
“The Reserve Bank of India’s (RBI) benchmark repo rate is at 4 per cent. This has pulled lending, and, hence, deposit rates down,” says Adhil Shetty, chief executive officer (CEO), BankBazaar.
By moving from a bank FD to an AAA-rated corporate FD, you may be able to boost returns by about 100-150 basis points (bps). But be choosy. “Stick to

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First Published: Oct 24 2020 | 6:07 AM IST

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