10% Interest on Bank Deposits in India

I forgot to mention that I’ve already left for India! Posts will be sporadic, but I may decide to sit down later this weekend and write up some short posts to publish over the next couple of weeks. I spent the first week in Fort Ramathra which is about as far away as you can get from the city – there is actually no pollution there. My uncle owns the fort and they’ve been rebuilding it and it now operates as a resort/hotel. Further away from civilization is harder to imagine – and how welcomed it has been! Anyways…

While on our way into one of the main cities (Jaipur) I noticed plenty of signs advertizing 10% interest rates on bank deposits. Sounds pretty good compared to our paltry 2-4% rates on offer these days for similar short terms… until one looks at inflation – it just dropped to about 8% annualized. So after inflation and after taxes rates are comparable for the most part.

Please take a look at the website for the Ramathra Fort – it is breath-taking. If you are planning a trip to India, I highly recommend spending a few days here. One of my cousins will take you for a hike to see the rural (and I mean RURAL) villages of India – a side of the country not normally seen by tourists.

Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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Showing 3 comments
  • guest

    hi preet,
    hope you are enjoying your stay in India…I was there for 3 months recently..

    i was looking at the Indian interest rates too…the only worry i have is the the exchange rate risk of the Indian rupee losing over Canadian dollar in a year.what is the percentage you might consider
    worth the exchange risk.. if the Indian interest rate is 10% & if we think 4% might be the exchange rate risk,,,the balance 6% would still be good isnt..

    thanks
    sam

  • Mark

    Wow. Inflation is 8 percent in india. That is incredible.

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