Bank FDs no more in Vogue

images-1-4your favourite bank fix deposit  no longer remain an attractive investment option,at least for two to three years.After a sharp drop in bond yields,market expert have turned bullish on short term debt fund and believe  robust liquidity flow to banking sector will ensure healthy inflows to the bond market in coming quarters.Following the demonstration of Rs 500 and 1000 currency notes by the Narendra Modi Government,the banking sector has seen deposits of over 6 lakh crores,which has resulted in lower interest rates and a strong liquidity-driven rally in bond and debt markets.Bond prices and yields moved in opposite directions;when yields fall prices rise vice-versa.

Rough estimate shows 3-4 lakh crores additional deposits are likely to come in the banking system over the next few week and the bulk of it will flow into the bond market,which will keep debt funds vibrant in the coming months.

At present,bond funds looks favourable for investors,who are planing to pull out money from banking system. Aggressive investor can put 65 percent of their money in equity and rest in debt.While conservative one can put their money 80 percent in debt funds and rest in equity.

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