Tuesday, June 17, 2008

Bank Deposits Rule The Investment Roost - June 17, 2008

igh inflation and bearish markets have led to low returns and disappointed investors over the past six months, with the equity and commodity markets being particularly affected. Banks have always performed well for those looking for steady incomes and secure investments. In the last six months, the bank deposits have increased.

"Deposit rates have risen since last year. Perceiving bank deposits as one of the safest investment tools in these conditions, many people have invested their money in banks for stable returns", says H C Pattnaik, CGM of the State Bank of India (SBI).

He says, "Last year, in the first quarter we had deposits worth Rs 430 crore while this year, in just two months, deposits have touched almost Rs 600 crore".

"Rising crude prices have global economies unstable and as a result investment sectors are all passing through a bad phase. Investors are opting for safe investment and no sector will provide more safety than banks", says G G Joshi, GM, Bank of Baroda (BoB).

He says the money flow has increased as the BoB increased 0.50% deposit rate two week ago.

"Though many investment avenues like equity market, mutual funds, and gold offer higher returns than bank rate, people prefer to invest their money in banks", said the ICICI Bank spokesperson.

He said safety is a prime concern for investors in India and hence banks lead as the most preferred option of investment.

"Bank deposits increased in the first quarter and we hope that more customers will take advantage of higher deposit rates", said T K Sharma, GM, Union Bank.

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