With the increase in deposit rates, I see a lot of banks raising their interest rates for certain odd periods 500/555/1000 days ,etc. The rate of interest has gone up to 9% and even more for senior citizens.
Definitely a good news for all those who have money ready to be parked in FDs.
Should on switch from low interest earning FDs to these higher interest earning FDs ? Should we sell some Equity MFs / Stocks to park in FDs?? are the frequently asked questions.
For switching between FD from low interest to high yield, calculate the loss out of withdrawal from existing FD and the interest rate gain that you would gain from new FD. Also be sure of the period that you would remain invested in.
If you have reached your long term goal in equity, then you may switch to FDs by selling your equity. But you have fresh money to be invested or invested in equity with a long term goal in mind already, do not just switch for the sake of getting a few % higher return. Switching on and off between debt and equity based on market trends wouldn't be so good for your portfolio.
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