Oh, yes! That’s probably the most right thing you have heard in a meanwhile that investing in fixed income products will never ever make you rich. It Certainly Has Most Specific Reason.
Fixed income products that offer fixed interest rates at a periodic rate till the end of maturity period. Some major banks around the world offer interest rates of more than 7.3% (Approx.) for Fixed Deposit of 1 – 5 years. Below is the chart Illustration,
Country Wise FD Rate
|Country||FD Rate||Inflation Rate||Tax Rate||Currency|
|United States||3.5%||6.2%||39.6% (Highest)||United States Dollar (USD)|
|United Kingdom||1.75%||2%||20 % (Highest)||Pound Sterling/ Euro|
|Japan||0.2%||0.6%||33.06% (highest)||Japanese Yen (JPY)|
|Russia||8.25%||8.9%||20 % (highest)||Russian Ruble (RUB)|
|Switzerland||-0.75%||-1%||17.92% (Highest)||Swiss Franc (CHF)|
|Germany||0.5%||2.2%||29.65% (Highest)||Euro (EUR)|
|India||8.75%||7.3%||34.61% (Highest)||Indian Rupee (INR)|
|United Arab Erimates||0.1875%||2.5%||55% (highest)||UAE Dirham (AED)
|China||2.60%||5.40%||25% (Highest)||Chinese Yaun (CNY)
|Australia||3.40%||3.10%||30% (Highest)||Australian Dollar (AUD)
|New Zealand||4.50%||4.50%||28% (Highest)||New Zealand Dollar (NZD)
|Africa||7.3% (Average)||11.3% (Average)||40% (Highest)||South Africa Rand (ZAR)
|Canada||1.70%||2.80%||26.50% (Highest)||Canadian Dollar (CAD)
|Saudi Arabia||3.88%||2.10%||20% (Highest)||Saudi Riyal (SAR)
|Brazil||10.75%||8.89%||34% (highest)||Brazilian Real (BRL)
Source: Seven Star FX Research Center
Since Probably, If you think that investing your hard earned money in FDs or Government Bonds might fetch you the higher yields, As they do compound your money quarterly. And you might think it’s a best investment product ever then you should think twice. As the returns, you get at the end of maturity period maybe not be as high as you may think. The Most Important Factors like inflation and Government Tax may shrink your returns as your FD or Bond matures during a certain time period. Our team looks much deeper into most obvious reasons that: Why returns from your FD returns are rock bottom from our perspective..??
Government Tax Extortion is applicable on almost all the Fixed Income instrument. As Deduction is a mandate Revenue for them on interest earned from your FD investments. So it generally means Higher your income lower will be your returns as you have to pay the higher Rate of taxes.
In some or almost all the cases, you might require to break your FD investments before maturity period, if certain emergency arises. In such cases you might have to pay a penalty imposed by the banks which might extend to 10% on your interest of your FD Returns. But Due to the Cut throat competition in today’s economy, there are certain commercial banks that might offers you FD’s with no penalty, In case, if you withdraw them before the Maturity period.
As the ancient saga continues that it is true that fixed income instruments may help you to build a shaggy Corpus for yourself after a long decade of periodic systematic investments. But if you only try to invest in your So Called Traditional: FD Investments then it never ever make you richer anymore as the returns may not be as high as you think. Hence for the alternative to get richer is the Global FX Market, where you can try your hands to our Best Platform available.
Date: 4th August, 2015
By: Seven Star FX Team