Investments

Stock Market

Inspite of factors like recession/slowdown, stock markets exhibited considerable strength due to recent inflow of FII money into market and hope that all negatives are already been factored in the current prices. Stock market may show positive trend, but any major unexpected bad news may again trip the market. Long term investor can start investing in the market in staggered manner over next 2-3 years as market may remain volatile. Investment in Systematic Investment Plan (SIP) is advisable.

 

Real Estate

There is a general slowdown in real estate market. Real estate is a highly illiquid market so price drops are not visible clearly. Activity level has dropped significantly as people are postponing purchases as they expect prices to correct further.

 

Gold

At present Gold is costlier than Platinum which is sign of global recession. Gold is a good investment when inflation is high and during financial uncertainties. With inflation touching new lows – gold prices softened a bit. Although lower inflation is not good for gold, if financial uncertainties increase (like more bank failures etc) then gold may gain. Also in India, gold prices depend on Dollar Rupee exchange rates.

Insurance/Mutual Fund

Opting for SIP (systematic investment plan) of Mutual Funds will be a good idea for next 2-3 years to take advantage of current low levels of market and also to avoid risk of bad timing. Please contact your SBI branch or nri.lhotri@sbi.co.in for details/investments.

Bank Deposits

Due to reduction of rates by all major central banks, globally deposit interest rates may come down in future. In India also – it is expected that interest rates will come down significantly. It is a good time for NRIs to lock in to the present high NRE/FCNB/NRO FD interest rates before rates come down. Also NRI Interest rates offered by SBI is substantially higher than interest rates offered by foreign banks in USA/UK. NRIs can also opt for DTAA benefit for SBI NRO deposit and earn 10% pre tax return.

 

NRI Interest Rates

From 1st Dec'08 - Interest Rates %pa	NRO Rs	NRE  Rs	USD $	Euro €	GBP £	Cand $	Aust $	Yen ¥
1 year to less than 2  years	09.50	4.52	3.77	4.96	5.12	4.01	6.13	2.13
2 years to less than 3 years	09.00	3.87	3.12	4.11	4.20	2.78	4.96	1.92
3 years to less than 4 years	09.25	4.14	3.39	4.21	4.39	3.00	5.39	1.97
4 years to less than 5 years	09.25	4.14	3.64	4.32	4.57	3.19	5.68	2.05
5 years (NRO upto 10 yrs)	09.00	4.14	3.82	4.43	4.70	3.35	5.77	2.12
1000 Days Deposit	10.00
NRO FD 0.50% extra for Senior Citizens (60+), TDS applicable and DTAA benefits can be claimed.  Saving Bank Interest Rate -3.50%,  All Subject to Terms & Conditions