I want to invest in fixed deposits. The confusion lies in choosing the tenure. Which is the best tenure to invest in?
On account of a slowing GDP (gross domestic product) growth, there is a lot of pressure on the Reserve Bank of India to reduce the rates to boost growth. Choosing your fixed deposit tenure depends on your investment horizon and liquidity requirements. You could also look at starting a recurring deposit wherein you can park your surplus savings regularly. There is no tax deducted at source on a recurring deposit and you can lock in at the prevailing interest rates, while deposits can be made in regular monthly instalments.
What is a floating rate deposit? Does it make sense in the present market scenario?
In floating rate deposits, the interest rate payable is variable in nature vis-a-vis the traditional fixed deposits where the interest rate is fixed for the tenure of the deposit. For floating rate deposits, interest rate is benchmarked to the market or policy rates. Hence, if interest rates rise, deposits will earn the higher rate and if rates fall, then the rates on deposits will decrease. The rates are readjusted on a pre-defined time interval (i.e. quarterly or half-yearly). During a high interest rate scenario, there will not be any upside on a floating rate deposit. You may consider availing a fixed deposit to lock-in at the prevailing interest rates offered.
My banks say I should have a nominee for my account and investments if I haven't. Why is it important? Will my legal heir not be my successor in any case?
Nomination is the fastest and easiest way for successors to get access to funds in case of an eventuality. If nomination is not present, then the legal heirs will need to prove succession through a will or other legal document. This process is time consuming and cumbersome.
I have taken a home loan with a leading private sector bank. I am servicing the interest presently, as my property is under construction. On four occasions, the bank deposited two cheques from my salary account in the same month when there weren't enough funds. They said it was a mistake. But, I was charged Rs 500 each time. Can I ask for a refund. What is the procedure?
If there has been a mistake in handling of your post-dated cheques, you may take up the matter with the home loan lender to make good the bounced cheque charges.
Prashant Joshi, MD & Head, Private & Business Clients (India), Deutsche Bank, answers your questions