What is the inflation adjusted Returns on your investments

What is the inflation adjusted Returns on your investments

FIXED Deposits – Banks

Banks are offering an interest of 5% to 7% on 1 year fixed deposit. The average deposit rate of Banks is around 6%. The Inflation from April 2020 till Oct 2020 is average 6.85% so the inflation adjusted return of Fixed deposit is – 0.85% (Yes it is negative)

Fixed Deposit – Post Office

Post office is offering 6.9% on one year Fixed Deposit so the inflation adjusted return is +0.05% (Almost Zero)

Debt  Mutual Funds

Top Debt Mutual Funds have given a return of around 12% so the inflation adjusted return is +5%

Equity

Nifty has given a staggering 40% returns in last 6 months but Year to date return is only 5.03% and 1 year return is 7.65% so inflation adjusted 1 year return is 0.75%

Peer to Peer Lending

Low Risk – 12%, Medium Risk – 18%, High Risk – 24%

So if we average low and medium risk products, the average is around 15% and the inflation adjusted return will be 8%

Ranking High to Low

1 Peer to Peer

2 Debt Funds

3 Equity

4. Post office FD

5. Bank FD

So think before you invest in any asset class.

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