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How you lose when you Deposit your money in Banks..?

Dear readers,

In the recent past rupee has depreciated more than ever before.

Most banks in India offers interest rated upto 10% p.a for resident term deposits maturing between 1-2 years. Comparing the interest rate with any other country this is the highest, It is very hard to see a 4% interest per annum for dollar deposit. This itself tell us how much weak our currency is at present.

Have you deposited your hard earned money in Banks as Term Deposits at the Rate of Interest 10% p.a.?

For an example, If you would have deposited Rs. 10,000/- at the rate of 10% p.a on 09.09.2012 for a maturity period of an year You will be getting Rs.11,000/-.

Sounds great right.

But if you are converting the matured amount to dollars it will fetch you only  USD168.08 (at the rate of Rs.65.24/USD) whereas initially you might have got USD 180.36 (at the rate of Rs.55.36/USD)

So you have lost USD 12.55 Dollars i.e 7% lose for keeping your Currency in Indian Rupee.

Now you compare the same with USD deposit.

If you would have deposited he same amount in in Dollar deposit atleast you would have got 4%. That means the net difference between a INR deposit and USD deposit is 11%.

Don't think I m writing against Indian rupee, its just a view of mine after one of my deposit with a Public sector bank matured last week.

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