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With investment avenues increasing by the day it is quite easy to forget that until the reforms era kicked off in 1991, Indians had very limited means of investing their savings.

While it is true that we have not yet seen any development on the lines of the more developed economies there are a number of instruments today that were unheard of amidst the lay investors just a short decade ago. Favorites such as fixed deposits (FDs) are meanwhile enjoying a renewed burst of popularity.

In a world where the returns on your investment are directly provide proportional to the inherent risks, it is but natural that the investor who opts for fixed income instruments is well into his chosen career. Basic family needs such as a self-owned house and reasonable insurance cover would have been provided for, but the proximity to retirement would prompt the need to lower investment risks. Also returns from investments form the principal source of income and preservation of capital is paramount and sufficient liquidity. There are basically three avenues for parking savings in the form of fixed deposits.

The most common are bank deposits. For nationalized banks. NBFCs and company deposits offer higher interest rates Post office Instruments are very safe and secure

investment avenue. The money is used in the development of the society as a whole, while it provides a steady returns. The biggest advantage of investing in post office schemes is the tax benefit that they provide.

Given the variation in fixed income instrument it becomes confusing for the common man to chooses a right avenue for his investments. We judge the particular investor options based on the following Guidelines :

• Evaluate credit risk
• Diversification
• Returns on the said security (long term and short term).

Given below is the current rate of interests prevailing in the market as on 30th April 2004.

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