Leave aside the high risk involved in parking money in stocks, the effort appears no longer worth it as returns have fallen much below the yield from a bank fixed deposit.
Following a plunge of over 500 points in the benchmark Sensex, the one-year return from the stock market fell to 7.13 per cent -- lower than the annual rate of return from bank deposits for a period as low as over three months.
Most of the banks currently give an annual rate of return of up to nine per cent to the general public, while for senior citizens it is up to 9.5 per cent.
According to the latest interest rate figures available, the country's biggest bank State Bank of India currently gives interest rate between 4.75-9.00 per cent to the general public and of 9.25-9.50 per cent to senior citizens, depending on the tenure of the term deposit.
Besides, SBI pays an interest rate of 8 per cent to the public on deposits in its tax savings scheme, while for senior citizens, this figure is 8.5 per cent and for SBI employees and SBI pensioners it is 9 per cent.
For term deposits by senior citizens, the rate is 9.25 for one-three years, 9.35 per cent for 3-5 years and 9.5 per cent for five to 10 years.
The rates for deposits ranging from 15 to 180 days are between 4.75-7 per cent. However, for 181 days-one year, it is 7.5 per cent, while for one-three years it is 8.75 per cent, 8.85 per cent for 3-5 years and 9 per cent for 5-10 years.
Even provident fund offers an interest rate of 8.5 per cent -- much higher than the return from the stock market.
The Sensex on Monday fell to its lowest level in nearly 11 months to close at 15,066.10 points following a plunge of 506.08 points during the day.
While the Sensex is still trading with a gain of nearly 1,000 points in the past one year, it is barely 7.13 per cent over its level of 14,063.81 points a year ago. Stocks have always been a riskier investment and lure of higher returns has been its major attraction.
The Sensex, which is considered to be the benchmark of the entire stock market, represents only 30 blue-chip companies -- which figure among the biggest in the country.
When it comes to smaller mid-cap and small-cap companies, the returns are even worse. For example, the one-year return from the mid-cap stocks is not even one per cent with the BSE Midcap index currently trading with a gain of just 0.23 per cent in the past one year.
For the BSE Small-cap index also, the one-year return is a mere 1.01 per cent, while that for the broader BSE 500 index is 7.94 per cent.
However, the performances have been relatively better by BSE 100 and BEE 200 indices at 10.35 per cent and 9.03 per cent, respectively.
Among the sectors, BSE Auto, Bankex, IT and Realty indices have actually registered a negative return in the past one year. While Auto is down 12.3 per cent, those for bank, IT and real estate stocks have lost 5.5 per cent, 11.4 per cent and 15.3 per cent respectively.
The gain has been a mere 0.4 per cent for the BSE PSU index and 1.03 per cent for the consumer durables index.
However, the BSE Healthcare index has gained 15.4 per cent, the metal index is up 50.25 per cent, the FMCG is up 30.02 per cent and the Oil and Gas index is up 31.26 per cent.
The Capital Goods index has gained 7.33 per cent during the past one, which is in-line with the broader market.
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