Break My Fixed Deposit? You’ve Got to Be Kidding Me

by Vinaya HS on October 4, 2011

in Finance

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Reading through my backlog of emails, here’s what I found:

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Why would I ever want to break my ultra-safe Fixed Deposit(s) that currently earn a handsome 9% — 10% per annum and instead invest my money in something that’s much much riskier (AA-!) and only assures me up to 12.50% per annum? The risk premium ought to be much higher than a measly 2.50%. Hike that up to 5.00% and I might consider investing some spare money. But I wonder what’s the spread on this one. I also wonder what the money mopped-up is being used for.

Hope you haven’t broken your Fixed Deposit(s) for this one.




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{ 2 comments… read them below or add one }

Rakesh October 4, 2011 at 10:32 PM

Vinaya,

Off late lots of NCD’s have been hitting the markets and some have got decent response too. Some of them are unsecured and some secured NCD’s. I am more comfortable with my FD’s earning 9.5 p.a.

Rakesh

Vinaya HS October 5, 2011 at 1:32 PM

@Rakesh:

Yeah. Imagine the risk premium you’d want to have on those unsecured ones.

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