It’s not only about saving your money, and putting them into various investment tools. Investors must try and ensure that the returns from the investments are able to beat the inflation. It’s a well-known fact that the value of money decreases with time. No doubt that savings can be as challenging as earning. To put it simply, inflation is the rate at which the cost of goods and services rises over time. In short, inflation means that your money may not be able to buy as much in the future as it could today.
However, in light of India’s retail inflation rate, which was 7.44% in July 2023, neither bank fixed deposits (FDs)nor the Public Provident Fund (PPF) is able to produce inflation-beating returns. Consumer Price Index (CPI)-based inflation shot past estimates to hit a 15-month high of 7.44% during July.
SBI, and ICICI Bank FDs between 7 days to 10 years will give 3% to 7.1% to general customers. Axis Bank offers interest rates ranging from 3.5% to 7.3% on deposits maturing in seven days to ten years for the general public, while HDFC Bank offers 3% to 7.25% on these deposits.
Small savings schemes that beat inflation
Sukanya Samriddhi Yojana (SSY): The popular girl child savings scheme Sukanya Samriddhi Yojana account will earn an interest rate of 8%.
National Savings Certificate (NSC): It has a lock-in period of 5 years. This will fetch 7.7% interest.
Post Office Monthly Income Scheme (MIS): This allows investors to generate a steady monthly income, and gives an interest rate of 7.4%.
Kisan Vikas Patra: KVP is giving an interest rate of 7.5%
Senior Citizen Savings Scheme (SCSS): Investors who are 60 years old can deposit up to ₹30 lakh over their lifetime in a Senior Citizen Savings Scheme to earn regular interest income. The senior citizens’ scheme gives 8.2%.
Mutual Fund SIPs have the potential to outperform inflation
According to money experts, investing in Mutual Fund SIPs can help you build wealth and produce returns that outperform inflation.
On August 10, the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.5 per cent for the third time in a row.
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Updated: 29 Aug 2023, 03:13 PM IST
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