Fixed depositors may turn to bond funds and rated corporate deposits

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Fixed depositors may turn to bond funds and rated deposits
Amidst falling fixed deposit rates of banks, investors may now start parking their funds in dynamic bond funds or fixed deposits of high-rated corporates and non-banking finance companies (NBFCs) to secure a better rate of return, said financial planning analysts.

Analysts said that banks have already started reducing their fixed deposit rates following the RBI's move to cut repo rate. They said most of the banks will, in some time, reduce their deposit rates as a precursor to lending rates cut.

Amid all this, said experts, dynamic bond funds, which include government bonds and corporate bonds, are gaining attention as they have that advantage of changing the duration of portfolio depending upon the interest rate scenario.

Also, they said investors are these days considering highly-rated fixed deposits offered by companies and NBFCs for investments.

Read more about: nbfcs
Story first published: Wednesday, April 10, 2013, 13:30 [IST]
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