Fixed Deposit Risk Level: Today, in the era of inflation, man is able to meet his expenses in great difficulty. In such a situation, if he invests some money from his earnings in a fixed deposit in the bank, then he must be aware of such precautions. So that he can face any risk in the right way in future. In this news we are going to tell you about the risks of FD. This can be news of your work.
FD is a safe investment
Generally people believe that the amount invested in FD does not fluctuate like mutual funds, hence FD is considered as a safe investment. The same thing has to be kept in mind that in FD, you get returns only according to the fixed interest rate. Much less than mutual funds.
keep these things in mind
Ramesh had an amount of Rs 20 lakh at the time of his retirement in 2000-01. He made a fixed deposit (FD) in the bank at 10 percent interest rate. Now Ramesh has got interest of about Rs 2 lakh on an amount of 20 lakh in a year. Which was enough to meet his expenses in 2000-01. Ramesh’s FD matures after 10 years. Now once again deposit the fixed deposit of the bank to avoid the risk. This time due to increase in inflation rate and decrease in interest rates, the real return on it has reduced significantly. Now Ramesh will also have to face difficulties in meeting his necessary expenses.
This is a risk, be careful
According to the Cost Inflation Index, a monthly expenditure of Rs 10,000 per month in 2000-01 equates to around Rs 31,593 in 2021-22 or around Rs 3,79,114 annually. Now, due to the reduction of 7 percent in the interest rate, Ramesh is getting only Rs 1.4 lakh every year. Even if the interest rate on FD is 10 percent, on his deposit of Rs 20 lakh, he would get only Rs 2 lakh in a year. That is, only Rs 16,667 per month. Which is much less than their current requirement of Rs 31,539. If his investment had increased with inflation, then according to the Cost Inflation Index, his investment of Rs 20 lakh in 2000-01 by now was to increase to Rs 63,18,574. Therefore, Ramesh may go bankrupt due to low interest rate and inflation hit.