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Investing

Camel Humps(Interest Rates)

Something really screwy is happening in our fiscal policy. Almost all the banks seems to be facing cash flow problems. Why I am saying this… visit HDFC bank
interest rates

You notice the humps… Even Citibank is showing them.
What I am saying is…. Interest rates are going to go down in the long term, and I also expect a lot of turbulence. So guys invest in fixed income instruments wisely and make the best of the situation. These imperfections are not expected to last for a very long time.

update: The real reason for these imperfections is to penalize those who encash their FD prematurely. As per the RBI rules the banks are obliged to give less of:
1) the Promised interest – 1%
2) the interest rate offered for an FD of the premature period – 0.5%
By having a 1.5% these camel bumps, the second proposal becomes very attractive for banks.

4 replies on “Camel Humps(Interest Rates)”

I don’t understand much of finance… but this seems to be a printing mistake… how can you have an 8 % in 100 days?

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