Imagine you’re like a farmer in UP who has a bountiful wheat crop of 50 lakhs in rupees and is looking for the best way to store it. If you choose the traditional granary – in financial terms, a bank fixed deposit – you might wonder how much grain or yield you’ll receive monthly.
For a bank deposit in India, the interest rate can range from 4% to 7% annually, depending on the bank, tenure, and the prevailing economic conditions. Let’s pick a middle ground and assume an interest rate of 5.5% annually.
- Your annual interest on a deposit of Rs. 50 lakhs at 5.5% would be Rs. 2,75,000.
- Dividing this by 12, the monthly interest would be approximately Rs. 22,917.
But wait! Before you make any decisions, it’s important to remember two things:
- Taxation: The interest earned from bank deposits is taxable. Depending on your income slab, you might end up with a post-tax return which is lower.
- Inflation: With average inflation hovering around 4-5%, a return of 5.5% might just help you maintain your capital’s purchasing power.
“Do not save what is left after spending, but spend what is left after saving.” – Warren Buffett rightly puts forth the principle of growing wealth. While a bank deposit ensures liquidity and safety, it’s crucial to have a portion of your wealth in growth-oriented assets.
To sum up, while the bank deposit might fetch you close to Rs. 22,917 per month, it’s just one aspect of the LSG framework (Liquidity-Safety-Growth) of Jama Wealth. And because every coin has two sides, it’s essential to balance the ‘safety’ of bank deposits with ‘growth’ investments. If your goal is to achieve consistent wealth appreciation, consult a SEBI Registered Investment Advisor who can guide you through a diversified approach, ensuring both stability and growth.
