SHALL I CONTINUE MY FIXED DEPOSIT INVESTMENT????

Continuation of FD / investing in MF

Anusridi wrote : "Dear Matrubhai,

One of my Bank FD which was giving 8.75% of interest has matured recently and if I continue for another one year I will get now 8.25% . I request your kind advise in this regard whether continue as Bank FD or put in LICMF floating rate fund (G)/Can Rebecco Gilt PGS(G)/Can Rebecco Income (G) LICMF liquid fund (G). Earlier I have given you u my portfolio that I am having MFS about 4L which are now about 2L due recession.
Please advise (within 2-3 days if possible).

With best wishes,
anusridi "

SRIKANTH SHANKAR MATRUBAI replied :


Dear Anusridi,


Bank FDs are safe, but in terms of returns, they are always low on my ranking.

The Debt Market is expected to see sharp volatility in the coming days. With the Inflation going into negative terrority, the yield curve would see a steep fall due to abundant liquidity in the system and the demand for short maturity assets. Rate cuts in the Credit policy should help improve the market sentiments, a sharp rally in the bonds is ruled out due to the bulging Fiscal Deficit.
For Short Term Investment, Liquid Funds is the way to go, for a slightly longer term investors, say upto 12 months, Gilt Funds and Active Income Funds should be advisable.

If you have decided to stay invested for 1 year, you can go for Income Funds like HDFC Income Fund or better still, invest in Corporate FDs like CNBC TV18, which offer 11% return for a 1 year FD.
Corporate FDs too are a good tool of investment and give better returns than traditional Bank FDs. And yes, they are quite secure too.

As for advice on your portfolio, You better send me your holdings for me to guide you. But, still, it should be noted, you are better off staying invested right now rather than selling at a loss.
Best of luck,
Srikanth Shankar Matrubai


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