There is a wise saying that "one penny saved is one penny earned". This is true even in the world of investment and saving. In today's volatile world your gain on equities or other investment options e.g. bond or fixed deposit can quickly erode due to depreciation in currency. This is what happening currently in India, with rupee depreciating to record low and inching towards physiological 1 USD = 70 INR, talk of capital protection is gaining momentum over capital appreciation. Since everybody focuses on capital appreciation and that is also the main objective of saving and investment, but if you don't pay enough attention to what happening around the world, you may quickly lose all your appreciation. If you are an NRI, who has positions on Rupee e.g. may be with an investment in equities or real estate, you can understand that with falling rupee, all those capital appreciation quickly erode.
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Recently one of my readers asked me that he wants to invest some money on NRE fixed deposits but confused on whether to go for foreign banks like Citibank, DBS, Standard Chartered, Deutsche Bank or Indian banks like ICICI, Kotak, HDFC, SBI, Axis Bank or Union Bank? I asked him, whether he has any existing NRE saving account , he says he doesn't have any existing NRE saving account? Then I ask him what is more important for you? the interest rate or convenience? and his answer was the interest rate. Read more »
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