Discussion in 'BlackHat Lounge' started by SeoNuuby, Nov 7, 2012.
What's the highest interest rate of the bank in your country for fixed deposit ?
I get an awesome 1% from my "high interest" savings account.... "HIGH" interest....
here in India.. one could get 9.5% for 1 year of fixed deposit..
LOL nice, how are the banks over their are they considered pretty safe?
Banks in India have upto 10% PA Interest Rate
Indian banks are considered safe because they have high capital adequacy and low NPAs.
India is a high growth, high inflation economy and thus interest rates remain high.
UK gets 0.5%-1% if you're lucky.
about 5% here in Bulgaria and no tax on savings yet
Why don't investors just put their money in an indian bank then instead of playing with stocks etc which can go down as well as up? If it really is that easy I'm going to put a whole loads into an indian bank.
The question only asks for half the picture.
The other half is the inflation rate of the local currency, as well as local taxes on interest income.
Indian accounts pay high interest rates on rupees - but if a rupee is worth 10% less after 1 year, you're pretty much where you started.
I was looking at a bank I think in turkey where the interest rates were about 15% but after two years I would have lost about 3% due to the currency going down against the USD.
So what is the inflation rate in india at the moment then?
Ok just googled it and seems to be at between 7-11% for 2012 so pretty pointless putting it in an indian bank then
Currency risk is the main risk for foreign investors.
Big investors can hedge their positions over the long term and they do invest in Indian debt. Indian government's 10-year bonds have a yield of over 8%.
Also tax rates are pretty high in India. That makes debt unattractive for many investors.
A 9% pre-tax return from a bond equals a post-tax return of just 6% for corporates and individuals in the highest tax slabs. In an economy where inflation consistently remains above 7%, a post-tax return of 6% actually means a loss.
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