Due to uncertainties in bond markets, investments consultants are suggesting their clients who want to park their money in debt instruments to consider traditional products like Fixed Deposits (FDs), postal schemes and senior citizen schemes.
‘‘We have been asking clients to stay away from debt schemes for the time being. If you are going to park money in a debt scheme for two or three years in a short-term fund or liquid-plus funds, you can hope to get only around 4.0-4.5%,'' says Kartik Jhaveri, director, Transcend Consulting
Amidst expectations of interest rate hike, the long term bond yields are likely to increase. If you are holding medium to long term debt, you are likely to suffer losses.
The experts said that though interest rates were about to go up any time soon, nobody wanted to take a call on the rates as they were not sure when RBI would start exiting its soft interest rate regime.
Some investment consultants held a contrary view and said that long term debt schemes were better for those who were ready to park money for three to five years as they expected the yields to even out by that time.