In the light of volatile fluctuations in the stock market, precious metals, real estate, and so on, small investors have limited investment opportunities, especially in rural India where people do not have adequate knowledge about diversified investment avenues such as mutual funds, corporate deposits and the stock market. Bank deposits are considered the best investment option. Lakhs of senior citizens prefer only bank deposits, which guarantee them assured returns on their investments, to see them through life. Though bank deposits are safe, the returns are not so attractive when compared to other investments such as SIPs, corporate deposits, and so on. TDS deduction on interest will further reduce the returns. On an average, the depositor will get a maximum of only 8 per cent return (after TDS) on bank deposits. Hence, TDS should be discontinued. Alternatively, the present interest limit of Rs 10,000 for TDS should be increased to at least Rs 50,000; the benefit should be extended at least to senior citizens, who depend totally on interest income.
- Udaya Sankar (HBL)
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