SBI online: If you have State Bank of India or SBI Fixed Deposits or SBI FD, SBI Recurring Deposit or SBI RD, then it's time to think whether this will be enough to meet your investment goals or you need to think of other investment options. According to the tax and investment experts, for short-term investment goals, one can continue investing in the Bank FD and Bank RD but for the long term, it will not be enough as inflation will eat a major chunk of the money you make. According to experts, one should not invest more than 10 per cent of one's portfolio in the Bank FD or Bank RD, however, they maintained that SBI being the largest commercial bank, can be a better choice even though it has decreased the interest rate on term deposits from one year to two years by 15 bps while on bulk SBI term deposits, interest rates have been reduced from 30 bps or 0.30 per cent to 75 bps or 0.75 per cent. Informing about the decision the SBI said that the decision has been taken keeping abundant liquidity with the bank in mind. To find the various interest rates applicable from 10th November 2019 by the SBI on term deposits and bulk deposits, one can check SBIonline, which is sbi.co.in.

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Suggesting investors to take lesson from the PMC Bank crisis, Jitendra Solanki, a SEBI registered tax and investment expert said, "Ever since SBI has slashed interest rates on SBI Term Deposit and bulk SBI deposits, a level of temptation has been witnessed among the investors to dump SBI FDs, RDs and other deposits and switch to other banks that are giving more interest on one's money. However, we suggest investors look from both angles, the return is primary but the safety of one's money is also of great importance. The SBI is giving lesser returns means it has enough liquidity available, which indicates sound financials of the leading Indian commercial bank." 

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Solanki was of the view that an investor should not invest more than 10 per cent of one's portfolio in the banks. But, this 10 per cent investment is in the early phase of one's investment journey. Therefore, choosing one's bank is also important and SBI is one of the safest options available in the Indian banking system.

Source: sbi.co.in

Elaborating upon the objectives of the Bank Savings Account and Bank FD, Manikaran Singhal, a SEBI registered tax and investment expert said, "Bank deposits are not for getting better returns. Basically it's goal is to meet these three objectives — liquidity, emergency and immediate needs. So, looking at the returns is secondary, the security of the money is primary, though RBI's depository terms and conditions are applied to each bank in the same manner. But, from the comfort point of view, people can go with big names like SBI or any other PSU bank. Those living in the urban part of India can go with the big private banks like HDFC Bank or ICICI Bank as well."

Source: icicibank.com

So, from next time, when someone goes for bank deposits, they should first look at the security of one's money and keep the above-mentioned experts' views in mind.

Source: hdfcbank.com