For, they are perceived to be safe, as cases of banks defaulting and investors losing their money are rare, unlike equities or gold where volatility has been the name of the game.
The interest rate on FDs hasn’t changed much over the years.
In 1973-74, the rate was in the range of six to 7.25 per cent; now it is eight-nine per cent.
Over the same period, inflation has moved from around six to over 10 per cent, leaving little in the hands of the depositor.
As against this, BSE Sensex stocks have given anuual returns of 16.6 per cent over a 40-year period.
In the case of gold, the return has been 12.3 per cent.
Fixed deposits
Even in terms of features, bank deposits have not seen much change.
Earlier, banks offered rainbow deposits, which are FDs linked to savings bank accounts.
When the money in your savings bank account crosses a certain limit, the excess funds move automatically to the FD, allowing you to earn more interest income.
These deposits are now more popularly known as 'Flexi' or 'Sweep-in’ deposits.
Delivery mechanism
The significant change has been on delivery.
The days of serpentine queues in bank branches are gone.
Thanks to technology, you can now open an FD or a recurring deposit from the comfort of your house or office.
If earlier, staff of public sector banks grudgingly accepted your account opening form.
Today they chase customers and conduct drives to open accounts.
The increased competition from private sector banks has been a help for customers.
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