Once upon a time, in the bustling city of Mumbai, two friends, Aman and Rohan, were on a mission to grow their wealth. Aman had always dreamed of owning real estate, believing it was the ultimate sign of success. Rohan, on the other hand, was intrigued by the idea but was wary of the challenges that came with it.

One day, Aman excitedly told Rohan about a property he had found. “It’s perfect!” Aman exclaimed. “A commercial office space right in the heart of the city. I can already imagine the rental income flowing in!”

Rohan smiled, but his thoughts were elsewhere. He knew the process Aman was about to embark on—the endless paperwork, the hefty loan, the constant search for reliable tenants, and the ongoing maintenance. “Aman, have you considered the effort and time this will take?” Rohan asked.

Aman shrugged. “Sure, it’s a lot of work, but it’s worth it, right? Real estate is the best investment.”

Rohan nodded but then leaned in closer. “What if I told you there’s a way to invest in real estate without all that hassle?”

Aman looked puzzled. “What do you mean?”

Rohan explained, “Have you heard of REITs? They’re Real Estate Investment Trusts. Think of them like mutual funds, but for real estate. You can invest in commercial properties without buying them outright. Instead of dealing with builders, tenants, and loans, you invest through a manager who handles everything—from finding tenants to maintaining the properties. And you still earn rental income in the form of dividends.”

Aman was intrigued. “But how do I know it’s a good investment? And what about the risks?”

Rohan smiled. “That’s the beauty of REITs. The properties they invest in are usually completed and income-generating, so there’s less risk compared to unfinished projects. Plus, they have to return at least 90% of their earnings to investors like us. But, of course, like any investment, there are risks. The value of the properties could drop, or the demand for office space might decline, especially after something like the pandemic.”

Aman was silent, weighing his options. “So, how do I get started?”

Rohan continued, “In India, there are already a few REITs listed, like Embassy Office Parks and Mindspace Business Parks. You can buy units on the stock exchange, just like you would with shares. Or, if you’re looking for more diversity, there’s a Kotak International REIT Fund of Funds that invests in both Indian and international REITs.”

Aman was sold on the idea. “This sounds much easier than buying a property outright. But is it as profitable?”

Rohan nodded. “It can be. REITs typically focus on Tier-1 cities where rental yields are higher. Over the past year, they’ve offered dividend yields of 6-8%. And unlike buying a property, you can start with a much smaller investment of INR 50,000/- —no need for big loans.”

Aman grinned. “You’ve convinced me, Rohan. This sounds like the smarter way to invest in real estate.”

But wait before you leave keep few things in your mind;

“Aman,” Rohan began, “if you’re looking for regular income, REITs can be a good option. But remember, it’s wise to only allocate a small portion of your investment—maybe 8 to 10 percent maximum —to them.”

Aman nodded. “That makes sense. But how do I make sure I’m choosing the right REIT?”

Rohan leaned forward. “You need to do your homework. Check how full the properties are, what kind of tenants they have, how long the leases last, and the quality of the buildings. Also, look at the REIT’s financial health.”

Aman was grateful for the advice but still had some concerns. “But what if I want to sell quickly? Are REITs easy to trade?”

Rohan shook his head. “That’s the tricky part. REITs are still new, and they can be volatile and hard to sell quickly. If you’re not comfortable with that uncertainty, you might want to explore other investment options.”

Aman was grateful for the advice but had the last question. “What about taxes? I heard it can get complicated.”

Rohan smiled. “It can be, but let me simplify it for you. Right now, the dividends you get from REITs are tax-free for you because the REITs are invested in something called SPVs, or Special Purpose Vehicles. These SPVs haven’t chosen the concessional tax rate, so they’re not taxed at the usual rate you might expect.”

Aman was intrigued. “So, if they did choose that concessional tax rate, what would happen?”

“In that case,” Rohan explained, “the income would be taxed at your regular tax slab rate. Also, if any income from the REIT becomes taxable, the REIT would deduct a 10 percent withholding tax before giving it to you. But don’t worry—you can adjust this when you file your income tax returns.”

Aman was relieved. “So, as long as I keep an eye on the REIT’s tax status, I should be fine, right?”

“Exactly,” Rohan said. “Just keep in mind that while REITs offer some tax benefits now, things could change. That’s why it’s important to stay informed.”

Aman thought for a moment. “So, REITs are good for some regular income, but I shouldn’t rely on them too much, right?”

“Exactly,” Rohan said with a smile. “They can be a part of your investment mix, but don’t put all your eggs in one basket.”

Aman felt more confident now, ready to make a balanced decision.

Once during a corporate session, an investor – Ravi (name changed intentionally here) asked me? Is it not wise to invest in a New Fund Offer (NFO) of a mutual fund house? To explain this better, let’s delve into a small financial story.

Let’s talk about Ravi’s financial knowledge first to understand the context better.

Ravi was diligent about his finances and took pride in managing his investments carefully. He had built a modest portfolio of mutual funds over the years, selecting them based on thorough research and advice from trusted sources.

One crisp January morning in 2024, Ravi’s phone buzzed with an enthusiastic message from his bank’s relationship manager. “Ravi, there’s an exciting new fund offering (NFO) launching today! This is a golden opportunity to invest at just Rs 10 per unit. Don’t miss out! He also mentioned that some XYZ fund house had recently collected Rs. 7,000 crores into the NFO application.”

Intrigued, Ravi couldn’t help but wonder if this was his chance to snag a great deal. After all, a low entry price sounded tempting, and the manager’s excitement was contagious. He remembered the success stories of IPOs where people made quick gains and thought maybe this NFO would be his ticket to similar profits.

But before making any decisions, Ravi decided to call his friend Vivek, who had a reputation for being wise with money. Vivek had always been a voice of reason in Ravi’s financial journey.

“Vivek, I just got a tip about a new fund offer. The units are only Rs 10 each! Should I go for it?” Ravi asked eagerly.

Vivek chuckled, sensing Ravi’s excitement. “Ravi, I can see why you’re interested. But let me tell you something about NFOs. They’re not like your IPOs where the excitement is about quick profits.

In an NFO, the price per unit isn’t an indicator of a good deal. What truly matters is how well the fund is managed and how it fits into your overall existing portfolio.”

Ravi listened intently, a bit surprised. “So, you’re saying that the Rs 10 per unit isn’t a bargain?”

“Exactly,” Vivek replied. “That Rs 10 doesn’t mean it’s cheap. What matters is the quality of the underlying portfolio and the fund’s potential to grow. NFOs often pop up when markets are high because it’s easier for fund houses to attract investors. But more funds don’t necessarily mean better opportunities.”

Ravi nodded, processing the information. “But what if this new fund has something unique to offer?”

“That’s a good question, Ravi,” Vivek said. “Before diving in any further, ask yourself three basic questions?

• Is this fund adding something truly new or uniqueness to your portfolio?
• Does it align well with your investment needs?
• Are there existing funds in the market with a similar strategy that have a proven track record?”

Ravi thought about his current investments. His portfolio was already well-diversified, and he wasn’t sure if this new fund would add anything valuable.

“Come to think of it,” Ravi said slowly, “I don’t think I need another fund just for the sake of it. Maybe I should wait and see how it performs over time.”

Vivek smiled. “Exactly. There’s no harm in waiting. In fact, many experienced investors prefer to watch a fund for a few years before committing. This way, you’re making informed decisions rather than getting caught up in the hype.”

Ravi felt a wave of relief. He realized that sometimes, the best investment strategy was patience. “Thanks, Vivek. I think I’ll give this one a pass, at least for now.”

With that decision made, Ravi went about his day, content in knowing that he hadn’t let the allure of a shiny new fund cloud his judgment. He knew that smart investing wasn’t about chasing every new opportunity but about making thoughtful choices that aligned with his long-term goals.

MORAL OF THE STORY: And so, the tale of Ravi and the shiny new fund serves as a reminder that not all that glitters is gold. In the world of investing, patience and careful consideration often lead to the most rewarding outcomes.

This is a short Story: The Tale of Arjun and His Insurance Dilemma

Once I got an opportunity to meet an investor in City A. His name was Arjun. Arjun was a responsible and caring father, always looking out for his family’s future. One day, he received the most joyous news—he was blessed with a beautiful baby boy. His heart swelled with love, and thoughts of his son’s future immediately began swirling in his mind.

Not long after, Arjun received a call from an old school friend, Ravi. “Congratulations, Arjun! I heard the good news,” Ravi exclaimed. They chatted for a while, reminiscing about old times. Then Ravi asked, “So, have you thought about securing your child’s future with a good insurance plan? I heard about these fantastic children’s plans from my relationship manager at the bank.”

Arjun was intrigued. He had heard of these plans but wasn’t sure if they were the right choice. The thought of securing his son’s future was appealing, especially with the rising costs of education and the uncertainties that lay ahead. But something in his gut told him to be cautious.

That evening, he sat down with a cup of tea and thought about Ravi’s advice. The idea of a children’s plan sounded perfect—after all, who wouldn’t want to ensure their child’s future? But Arjun was a prudent man and decided to seek some advice.

The next day, Arjun called his friend Vivek, who was known for his wisdom in financial matters. “Vivek, I’m thinking about buying an insurance plan for my son. Ravi mentioned these children’s plans, and I was wondering if it’s a good idea.”

Vivek listened patiently. After a moment, he replied, “Arjun, I understand your concern for your son’s future, but let me tell you something. These so-called children’s plans are nothing but marketing gimmicks. They’re designed to play on your emotions and make you believe they’re essential, but in reality, they’re often low-yielding and complicated.”

Arjun was puzzled. “But Vivek, how do I ensure my family is protected?”

Vivek smiled and said, “It’s simple. All you need is a plain vanilla term insurance plan. The thumb rule is to have life cover of 10 to 15 times your annual earnings. This way, even if something happens to you, your family will be financially secure. Life insurance is about providing peace of mind, not making money. Don’t get lured by the idea of insurance as an investment.”

Arjun thought about it. “But what about the ULIPs and other guaranteed plans I’ve heard about?” he asked.

“Arjun,” Vivek continued, “those are often traps that mix insurance with investment, and they rarely perform well. What you need is a simple term plan without any added riders. It’s the most affordable and effective way to protect your loved ones. You see, life insurance isn’t about getting rich; it’s about ensuring your family’s well-being when you’re not around.”

Arjun felt a weight lifted off his shoulders. Vivek’s advice was clear and straightforward, just like the man himself. Arjun thanked his friend and decided to follow the path of simplicity. He chose a term plan, knowing that his family’s future was now secure.

From that day on, Arjun felt a deep sense of peace. He knew he had made the right choice for his son, not by falling for flashy promises, but by understanding what truly mattered. And with that, Arjun continued to cherish every moment with his family, knowing that come what may, they would be taken care of.

MORAL OF THE STORY : – And so, the tale of Arjun and his insurance dilemma serves as a reminder that sometimes, the simplest solutions are the best. Life insurance isn’t about making profits; it’s about providing security, peace of mind, and love that lasts beyond a lifetime.

This is the “The Tale of Varun and His Investment Journey.” Once upon a time in a bustling city – Pune in India, there lived a young professional named Varun. He was a hardworking software engineer, juggling long hours at work while dreaming of a financially secure future. Varun had always heard that investing in mutual funds was a smart way to grow his money, so one day, he decided to dive in.

Excited and eager, Varun began searching the internet for advice on mutual funds. But as he scrolled through endless pages of information, he became increasingly confused. There were so many different types of funds: equity funds, debt funds, balanced funds, and even something called hybrid funds. Each fund seemed to promise something different, and every website he visited recommended a different strategy.

Varun felt lost. He wanted to invest wisely, but he didn’t know where to start. The more he read, the more overwhelmed he became. He just wanted a simple solution—something that could give him a steady return of 12 to 18% per year. He wondered, “Why is this so complicated? Why can’t someone just tell me where to invest?”

One evening, Varun decided to visit his uncle Ravi, who had been investing in mutual funds for years. Ravi had always seemed calm and confident about his investments, and Varun hoped he could offer some guidance.

Over a cup of tea, Varun poured out his confusion to his uncle. “I want to grow my money, but there are so many types of funds out there! Some people say I should invest in multi-cap funds, others suggest debt funds. I don’t know which one is right for me.”

Ravi listened patiently and then smiled. “Varun, you’re not alone. Many people feel the same way when they first start investing. But let me tell you something important: the key to successful investing isn’t just picking a fund with a fancy name or a high return. It’s about understanding your own financial goals and matching them with the right type of fund.”

Varun looked puzzled, so Ravi continued. “You see, over the years, SEBI, the regulator of the mutual fund industry in India, has made many changes to protect investors like you. They’ve simplified fund categories and made it easier to understand what each fund does. But even with these changes, it’s still up to you to decide which fund aligns with your goals.”

Ravi explained that SEBI had organized funds into 36 different categories, each designed to serve a specific purpose based on investment timelines, risk levels, and expected returns. “For example,” Ravi said, “if you want to invest for a short period, like 3 to 6 months, you might consider a liquid fund. But if you’re thinking about long-term goals, like retirement in 10+ years, an equity fund could be more suitable.”

Varun nodded, beginning to see the importance of planning his investments according to his goals. “But how do I know which category is right for me?” he asked.

Ravi replied, “Start by thinking about what you want to achieve. Do you need to save for a down payment on a house in the next five years? Or are you building an emergency fund for unexpected expenses? Each goal will require a different type of fund. Once you’re clear on your goals, you can map them to the appropriate fund category.”

Varun felt a sense of relief wash over him. It all made sense now. Instead of getting lost in the sea of fund options, he needed to focus on his own financial goals and choose funds that would help him reach them.

“Remember, Varun,” Ravi added, “investing is a journey, not a sprint. Take your time to understand your needs, and don’t be swayed by flashy ads or the latest trends. The right investment is the one that helps you achieve your goals, not the one that promises the highest returns.”

Varun left his uncle’s house that evening with a new sense of confidence. He knew he had a lot to learn, but he was no longer intimidated. Armed with a clear understanding of his goals and the knowledge that he needed to map them to the right fund categories, Varun was ready to take control of his financial future.

And so, Varun’s investment journey began—not with confusion and doubt, but with clarity and purpose. And in the end, that made all the difference.

MORAL OF THE STORY: – This story illustrates the importance of aligning financial goals with the right mutual fund categories, making the complex world of investing more relatable and actionable for your audience.

In a quaint little town, there lived a wise old man named Arjun, known for his simple yet insightful stories. One evening, as the townspeople gathered around him at the local tea shop, the conversation turned to the recent ₹ 2 increase in milk prices.

“Arjunji,” a young man named Raj asked, “why should we worry about such a small increase? It’s just ₹ 2.”

Arjun smiled, sensing a teaching moment. “Raj, let me tell you a story about the hidden force that quietly chips away at our savings: INFLATION.”

The crowd leaned in closer, eager to hear more.

“Imagine,” Arjun began, “ten years ago, in 2011, you could buy a half-liter packet of milk for ₹ 13. Fast forward to today, that same packet costs ₹ 24. That’s a yearly increase of about 6.32%. Now, what does this mean for us?”

Raj and the others exchanged puzzled looks.

“Let’s say,” Arjun continued, “you had ₹ 10,000 back in 2011. With the way prices have risen, that ₹ 10,000 is now only worth about ₹ 5,418 in terms of what it can buy. You might have fixed deposits in the bank earning interest, but inflation has a way of eating into those gains.”

The villagers started to see the point, nodding in agreement.

“Imagine,” Arjun went on, “you invested ₹ 50,000 in a bank deposit earning 7% per year, while inflation was rising at 6.5% per year. On paper, your money grows, but in reality, its purchasing power stays almost the same. After ten years, your ₹ 50,000 becomes ₹ 98,357, but what you could buy with ₹ 50,000 now costs ₹ 92,282. So mathematically, you’ve only gained ₹ 6,075 in real terms.”

The realization began to dawn on the crowd. They had always believed their savings were growing, but now they understood how inflation was quietly eroding their wealth.

Arjun continued, “Now, imagine if inflation increases by another 1-2% and stays high for a long time. What you’ve saved might not be enough to cover your needs. This is already happening to many people, but they don’t see the connection between inflation and their savings.”

A woman in the crowd spoke up, “So, Arjunji, what can we do?”

Arjun smiled gently. “You need to invest in something that grows with inflation. Fixed deposits and savings accounts might feel safe, but they often don’t keep up with rising prices. Equity and equity-linked investments, though riskier, can offer better protection against inflation. If you don’t consider inflation in your planning, your investments might not meet your needs in the future.”

The crowd sat in thoughtful silence, absorbing the wisdom Arjun had shared.

“Remember,” Arjun concluded, “inflation is like a quiet thief. If you ignore it, it will slowly take away the value of your hard-earned money. But if you plan wisely and invest in ways that outpace inflation, you can protect your wealth and secure your future.”

As the villagers dispersed, Raj and the others left with a newfound understanding of how even small changes, like the ₹ 2 increase in milk prices, were signs of a bigger issue they needed to tackle. And they knew that with Arjun’s guidance, they could be better prepared for whatever the future held for them.

So the next time when you initiate goal based financial planning please factor in the INFLATION.

Quite often I come across portfolios laden with too many funds. The common investor’s psychology and the reason they provide is that they are trying to achieve DIVERSIFICATION. So let’s try to understand this concept through a simple village story today.

Once upon a time in a small village, there lived a wise old farmer named Suresh. Suresh had a large farm where he grew a variety of crops, raised chickens, and tended to a small orchard. Every year, he would tell the village children the same story as they gathered around him during the harvest season.

“Children,” Suresh would begin, “have you ever heard the saying, ‘Don’t put all your eggs in one basket’?” The children would nod eagerly, for it was a lesson they all knew well. “It’s a simple idea, isn’t it? If you put all your eggs in one basket and the basket falls, you lose everything. But if you spread your eggs across different baskets, even if one falls, you’ll still have some eggs left.”

The children understood this easily. It made sense. Then one day, a curious boy named Arjun asked, “But Grandpa Suresh, if spreading eggs across baskets is good, wouldn’t it be better to use more and more baskets? What if we use 10 baskets or even 50?”

Suresh chuckled and patted Arjun on the head. “Ah, Arjun, you’re thinking like a smart investor now! But let me tell you another story to explain why that might not be the best idea.”

He took a deep breath and began. “Imagine you have ten baskets, and you carefully place your eggs in each one. But what if you had so many baskets that you could only put one egg in each? Imagine having 50 or 100 baskets! It would be hard to keep track of all those baskets, wouldn’t it? You might forget where you placed some eggs, and in the end, the eggs wouldn’t be safe at all.”

Arjun frowned, trying to understand.

Suresh continued, “Now, think of these baskets as mutual funds. When you invest your money, spreading it across a few funds is like spreading your eggs across a few baskets. It’s smart and helps protect you if one investment doesn’t do well. But if you invest in too many funds, it becomes hard to manage. You won’t be able to keep track of what each fund is doing, and you might end up with many funds that are all holding the same types of stocks.”

The children leaned in closer, eager to learn more.

Suresh smiled at them. “The truth is, mutual funds are already diversified. Each fund is like a basket holding eggs from many different hens—stocks from many different companies. If you have too many funds, it’s like having too many baskets that are all the same. Instead of protecting your money, you’ll just create more work for yourself, and you won’t gain much in return.”

Arjun’s eyes lit up as he began to understand. “So, Grandpa Suresh, it’s better to have just a few baskets with enough eggs in each, right?”

“Exactly!” Suresh exclaimed. “For most people, having three or four well-chosen mutual funds is just the right number. Any more, and you’re just making things harder for yourself without getting any real benefit. Remember, the goal of diversification is to protect your money, not to make things more complicated. Keep it simple, and you’ll be able to watch over your investments carefully and make sure they’re growing well.”

The children all nodded, feeling wiser from the story. They knew that whether it was eggs in a basket or money in mutual funds, it was important to find the right balance. And with that, they ran off to play, leaving Suresh with a satisfied smile, knowing he had planted another seed of wisdom in their young minds.

With this short story I hope I was able to convey my ideas well. If yes, please share your comments on my page. Or in case you feel I should write on some specific topics please do so.

On Monday 5^th Aug 2024 the market (Sensex) crashed by a whopping 2.7%. The reasons are several like the fears of a US slowdown, Israel-Iran tensions, sharp appreciation in the yen, etc.

It’s been a while since I have narrated a story to my readers. So, I thought of changing the narrative a bit today. To make you understand how the recent market changes impact you let’s go through this small story today and understand about a type of fund that might suit your appetite.

Once upon a time, in the bustling world of finance, there was an investor named Raj. Raj was a seasoned investor, always on the lookout for opportunities that could offer both growth and stability. He understood that every investment portfolio needed a strong core, something that could anchor it in turbulent times and adapt seamlessly to changing market conditions. But finding the perfect balance between risk and reward was always a challenge.

One day, while sifting through various investment options, Raj stumbled upon a unique type of fund—an Aggressive Hybrid Fund. These funds, once known as balanced or equity-oriented hybrid funds, caught his attention. They seemed to possess the exact qualities he was looking for in a core portfolio investment.

As Raj delved deeper, he discovered the secret sauce behind these funds. The fund manager had the power to skillfully balance the fund’s equity and debt allocation based on market conditions. By law, the equity exposure in these funds had to stay between 65% and 80%, ensuring a robust growth potential while still offering a safety net. Raj realized that this kind of fund would require minimal maintenance on his part, freeing up his time and energy to focus on the more active elements of his portfolio.

But, as with any investment, there were a few things to consider. Raj noted that with an Aggressive Hybrid Fund, he couldn’t dictate the exact mix of equity and debt. This could be a drawback for more conservative investors who might prefer a lower allocation to equity. However, Raj was confident that the dynamic nature of the fund’s allocation would suit his goals perfectly.

These funds are designed to deliver capital growth through a carefully crafted blend of equity and debt—a combination of growth and safety. The higher equity allocation offered the promise of high returns, while the debt component acted as a cushion during market downturns. Yet, he also understood that during a bull run, the debt portion might temper the fund’s performance, pulling returns lower than a pure equity fund.

What truly intrigued Raj was the low downside risk associated with Aggressive Hybrid Funds. Compared to other equity funds, these funds exhibited the lowest downside standard deviation—a measure of volatility that focuses on downward risk. This meant that during turbulent times, his investment would be less exposed to severe losses.

This is the reason I have brought about this point in times such as these where the market is in a topsy-turvy situation. An aggressive Hybrid Fund is an ideal candidate to form the core of an investor’s portfolio. It’s an investment that could stand strong through the ups and downs of the market, giving Raj the peace of mind to explore other opportunities. And so, with a sense of confidence and excitement, Raj decided to make this fund the anchor of his financial journey, knowing that it would guide him steadily toward his long-term goals.

The recent changes by the Finance Minister on July 23, 2024, eliminated the indexation benefits that allowed sellers of property and gold to reduce their taxable gains.

How Indexation Worked:
Suppose you bought a property for ₹ 40 lakh in 2015-16 and sold it for ₹ 80 Lacs before the recent budget. You were allowed to adjust the cost price of the property for inflation (using indexation), which would increase the cost price to around ₹ 57.16 lacs, according to the cost inflation index. The taxable gain of approximately ₹ 22.84 lakh would then be taxed at 20 percent, resulting in a tax liability of about ₹ 4.56 lacs. Refer to the illustration below.

Under the New Rules: – Without indexation, the property’s cost price remains ₹ 40 lacs when selling it for ₹ 80 Lacs. Thus, you will pay a 12.5 percent tax on the ₹ 40 lakh gain, amounting to ₹ 5 Lacs which is more by ₹ 44,000 here.

In summary, while the LTCG tax rate for properties held over two years (and gold) has been reduced from 20 percent to 12.5 percent, the actual tax liability may increase since sellers can no longer adjust their purchase price for inflation. The impact will vary depending on the specific purchase/sale price and timing.

For decades, fixed deposit instruments were considered the most preferred financial instrument for savings purpose for our grandparents and the older generations. In the mid-90s era the FD rates were a whopping 12% while when we moved to 2008-09 it was 8.38% and now it has dipped down to 6.5%

This is the worst time to invest in FDs. Their interest rates are at a multi-year low. The nationalized banks and other private banks are offering FD rates in the range of 6% to 7.2% per annum, depending on your tenure, and a touch 0.5% higher for senior citizens.

On the other side, the CPI (a macroeconomic indicator of inflation) inflation for May’24 was at 4.8% approximately. This means that you are losing your purchasing power by investing in Fixed Deposits with the effect of inflation too.

Let us understand this through an example. Assume you invest ₹ 10,000 for a year at the rate of 6.8% with a nationalized bank it will yield ₹ 10,680. But with the inflation coming into picture your real rate of return would be ((1+r)/(1+i)) – 1 = 1.908% which when multiplied by ₹ 10,000 will give you only ₹ 10,190.80.

This means that inflation ate away your additional return i.e., 680 interest earned through the bank minus inflation of 4.8% resulting in a loss of (₹ 680 – ₹ 190.80) = ₹ 489.20.

You should also note that the interest earned on a fixed deposit investment is subject to tax deducted at the source. Now, tell me with such a low yield product would you still want to invest in the FD product, or should you move to some other financial products which offers you better returns?

Now the next time when you think about FD think what you are doing with your idle money.