Dear readers, in this climate of low interest rates, there are some banks which are offering higher fixed deposit rates so as to attract individuals to park their monies with them for a fixed period.
This is one good way to earn some returns on your monies on the back of low interest rates, sluggish economies and volatile stocks markets. The yields offered by the bank typically averages about 1% for a year of holding period.
However, investors should take note that the more monies they park with the banks to enjoy the higher fixed deposit rates, the less investment war chest that they could have to take advantage of the stock markets when they correct. Granted, the investor could withdraw the fixed deposit earlier but they are likely to suffer some penalty. And this penalty is likely to cause them to still stick to their fixed deposit holdings.
When stocks markets correct and you invest in index-based ETFs, the returns you will be getting once stocks markets rebound will greatly triumph that of the interest of the fixed deposits.