• Traditional savings products may suffer from some disadvantages
Certain traditional savings products may suffer from lower liquidity on account of premature withdrawal charges coupled with lower net of tax returns. On the other hand, corporate bonds potentially offering high returns may come come with higher risk levels.
• G-Secs - an investment option for the medium term
G-secs are highly liquid and have sovereign rating making them a safe avenue. Their likely inclusion in global indices could also drive capital appreciation for investors in the medium term.
• G-secs yield curve attractive up to a 5-6-year period
Hawkish global banks, strong high frequency domestic indicators and RBI rate hike expectations have elevated the short end of G-sec yield curve; thus, currently offering attractive yields.
• An efficient way to invest in G-secs – Passive Debt funds
These funds seek to track and replicate the performance of an underlying debt index by investing in the same securities, and in the same proportion as the index it tracks.
They have no lock-in making them highly liquid, at the same they offer predictability of returns, safety and tax efficiency.