Inflation And Actual Return on FD: If you are thinking of investing your money, then this news can prove to be of use to you. It is known that the condition of the capital market is bad due to inflation at the global level. See how inflation will affect your actual returns.
View Real Rate of Return
Some people are investing money in the fixed income scheme in the market considering it as safe. Also, he is unable to focus on inflation adjusted returns while investing. In such a situation, when you can understand the real rate of return from the annual inflation rate.
Understand the real rate of return on FD like this: Calculator
Real rate of return = [(1+नॉमिनल रेट)/ (1+महंगाई)] -1
State Bank of India
Interest on 5 year FD: 5.50 percent
Current Inflation Rate (CPI): 7 percent
Real Rate of Return: [(1+5.50)/ (1+7)] -1 = -1.402
Bank of Baroda
Interest on 5 year FD: 5.50 percent
Current Inflation Rate (CPI): 7 percent
Real Rate of Return: [(1+5.50)/ (1+7)] -1 = -1.402
ICICI Bank
Interest on 5 year FD: 6.10 percent
Current inflation rate: 7 percent
Real Rate of Return: [(1+6.10)/ (1+7)] -1 = -0.8411
HDFC Bank
Interest on FD of 5 years: 6%
Current inflation rate is 7 percent
Real Rate of Return: [(1+6)/ (1+7)] -1 = -0.9346
Axis Bank
Interest on 5 year FD: 5.75%
Current Inflation Rate (CPI): 7
Real Rate of Return: [(1+5.75)/ (1+7)] -1 = -1.1682
keep these things in mind
You should know that you are in profit in the fixed income scheme giving 5 to 6.5 percent return. Keep in mind that whenever you choose an option, see whether it is getting more interest than the current inflation rate. The inflation rate is 7 percent and the interest rate in a scheme is 5 to 6 percent. So it is clear that the real rate of return will be in the negative.
Disclaimer: (The information provided here is for informational purposes only. It is important to mention here that investing in the market is subject to market risks. Always consult an expert before investing money as an investor. Anyone from ABPLive.com Also investing money is never advised here.)
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