RBI Credit Policy

Give me detail about RBI Credit policy and fixed income investments?

[Pathak]

You want to know about RBI Credit policy and fixed income investments so here is its details:

With the Reserve Bank of India slashing Repo rates, there is renewed expectation that people will loosen their purse strings and invest. In such anticipation, be it extension of tax free bond issues of IRFC & HUDCO and attractive fixed deposits schemes or fixed maturity plans, each product manufacturer in the financial market, is putting its best foot forward to lure investors' money. This calls for a strong reason for tweaking your fixed income investments. Here are a few options you should consider in mind while falling for such attractive options:


Bank fixed deposits
If you are a bank fixed deposit investor, you have to lock in your bank fixed deposits for a long term. Typically, banks are offering higher interest rates for one year tenure. However, as the interest rates move down, you are exposed to reinvestment risk. You may have to deploy your proceeds of one year fixed deposit at a lower rate, next year. Hence it makes sense to go for three to five years fixed deposit if your cashflow needs permit. You can get interest rates in the range of 8.5% to 9% on bank fixed deposits. Interest on bank fixed deposits are added to individual's income and taxed at marginal rate of tax.

For more detail you are free to downlaod attached file.