Why FD Fixed Deposit is Bad Choice for Retirement Planning in India, FD as Investment for Retirement
It's very common in India that people plan their Retirement In India depending on interest earned from FD Bank Fixed Deposit. They assume as if interest on FD Fixed Deposit will remain constant forever.
Interest rate on FD Fixed Deposit is quite high currently, FD Interest rate in India is touching 7% in 2019, and FD Fixed Deposit Interest will remain more or less same in coming year 2020 in India.
Interest on FD Fixed Deposit in India doesn't vary much from bank to bank, for example, interest rate on FD Fixed Deposit in SBI is 6 to 7% and interest rate on FD Fixed Deposit in ICICI and HDFC is also same, 6 to 7%.
Highest interest rate on FD Fixed Deposit in India about 8 % offered by post office. Highest interest on FD Fixed Deposit is offered by ICICI bank and YES bank who offered 7.5 % in 2019.
This video explain the problems which you will face if you choose FD Fixed Deposit as retirement income pension. It's not wise to rely on FD Fixed Deposit.
Interest rate is continuously reducing on FD Fixed Deposit, interest rate on FD Fixed Deposit in 2020 will remain between 6 to 7%. Best interest rate on FD Fixed Deposit will be offered by same bank, like ICICI, SBI and Post office FD. Post Office FD usually gives highest interest rate on FD Fixed Deposit.
Not just interest on FD Fixed Deposit, interest rate is also reducing on earning tools of banks like personal load, home loan, car loan. This trend will continue.
Remember that interest earned on FD Fixed Deposit is taxable.
Also do consider inflation into consideration for retirement planning. Inflation in India in 2019 is 3%, inflation in India in 2020 will remain same 3%, but as economy stabilizes, inflation is expected to reduce.
Video also explains how Banks earn.