the knowledge of interest rates important etail banker? s it impact the sales pitch? e investors options during high & low intere Faculty name: Vishwanathan R Batch code HYD01AA0213 Date 30-10-2013 Student Name Enrolment ID Harivardhan E130031000112 Rajasekhar E130031000127 Kowsar E130031000129 Amit E130031000147
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Investment habits during High & Low Interest rates
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Why is the knowledge of interest rates importantfor a retail banker?How does it impact the sales pitch?What are investors options during high & low interest rates
Faculty name:Vishwanathan R
Batch codeHYD01AA0213
Date30-10-2013
Student Name Enrolment ID
Harivardhan E130031000112
Rajasekhar E130031000127
Kowsar E130031000129
Amit E130031000147
S. No Description
1 Interest Rates
2 Different types of Interest Rates
3 Factors affecting Interest Rate
4 Correlation between Interest Rates and Investment
5 Best investment option on current Interest Rates
6 Essential things to know for a retail banker on Interest Rates
7 Bottom Line
8 Bibliography
CONTENTS
Interest rate
This is the amount calculated as a specified percentage of the amount lent to the Borrower. This amount is paid by the borrower to the lender.
Interest rate Lender Borrower Period Current interest rate
Previous Interest rate
Bank rate RBI Commercial banks
Long period 8.75% 9.00%
Repo rate RBI Commercial banks
Short period 7.75% 7.50%
Reverse repo rate
Commercial banks
RBI Short period 6.75% 6.50%
Base rate Commercial banks
Customers Bank regulates
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Call rate Bank Bank Bank regulates
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Deposit rate Customer Bank Bank regulates
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Factors affecting interest rates
Demand/Supply of money
Govt borrowings &Fiscal deficit/OMO
RBI Inflation
When economy is growing
International forces
Interest 1 investment
Int rate investment
Correlation b/w interest rates and Investment
Investment option when interest rates
HIGH
• FMP
• NCD
• Corporate Bonds
• Bank deposits
LOW
• CD’s
• CD’s
• Stock
• Home loan
• Fixed maturity plans: A close ended fund that invest in debt and money market instrument. Focus of a fixed maturity plan is to provide a stream of income through interest payments, while exposing the investor to a lower level of risk.