With the stock markets falling to new lows every day, investors have turned quite conservative and looking for alternative investment channels. One can always argue that this is probably a good time to enter the market, with good stocks available at attractive rates. SAIL, a public sector stock which gives good dividend yield and typically was trading close to Rs. 100 is now available at less than Rs. 70, almost a 30% discount. Likewise, GAIL, Union Bank and several other stocks are available at good valuations.
On the other hand, banks have hiked the Fixed Deposit rates by a few points in the last two months. One should ideally maintain about 20-25% investments in FDs. These would form the conservative and risk-free portion of one’s investments. FDs have advantages of giving slow but sure returns, and your capital being secured.
Small finance banks like Equitas, Ujjivan, RBL, Utkarsh small finance banks are giving close to 7.5-8% returns. As a cautious and smart invester, it will certainly make sense to park a quarter of your investments in these FDs. If there is a senior citizen in the home, book your investments in their name to avail an extra 0.5% interest, and to decrease any outflow on account of Tax(Note that all FDs are taxable at source, unless specific exemption is claimed).
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