Save your retirement

Dhirendra, lot of people are in a fix as the interest rates on fixed deposits have come down. They depend heavily on interest income for their expenses. What is the reason behind the interest rates coming down? Dhirendra: Interest rates have been coming down over a period of time. They are linked to inflation. And for the first time in many, many years, it has happened that Indian investors are getting positive returns from fixed income. The return on fixed income is more than inflation as calculated by the government. Earlier, we used to see high interest rates, but they were generally a little bit more than inflation. So effectively, your earned money was not going up in value. Given the current scenario, I think we are in for a phase where interest rates will come down. Interest rates will come down because the government started targeting inflation and that's actually right for the government. Maybe inflation will

This article was originally published on November 22, 2019.