revhappy
Arch-Supremacy Member
- Joined
- Mar 19, 2012
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How bro?, Overnight 12-month MIBOR now 3.39%. Unlikely u can get an instrument in india that is risk free at 7%. PLUS the FX depreciation may wipe out all ur gaind and eat into your capital.
Standard Chartered bank offers like 5.6% for 18 months.
https://www.sc.com/in/deposits/interest-rates/#sc-lb-module-fee-and-rate-5
This is a safe bank. But there are smaller banks that offer like 7%. Currently there is a lot of perception of high risk in smaller banks and they need to offer higher rates to attract deposits, so rates are high. But I dont keep a lot of money in them, more like less than 5% of my networth.
The central bank of India typically doesnt let bank depositors lose money, like in the case of the recent LVB bank that got merged with DBS bank, the bond and equity holders got wiped out but deposit holders got bailed.
FX depreciation is indeed a risk. But I monitor India macros, FX reserves, trade deficit etc and currently they all look okay.
Disclaimer: I am an EP holder from India, so I will eventually have to return to India and that will be my place of retirement, so INR is my base currency. So, that is a bit of a hedge, but I also wouldnt convert to INR, if the macros look bad.
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