Why do people trust FD more than savings account or current account?

According to a survey report released on Thursday by FICCI and Indian Banks Association (IBA), people are inclined towards fixed deposits in view of high interest rates. In the current round of the survey, more than half i.e. 57 percent of the people have said that they have reduced their stake in savings and current accounts.

Common people have more trust in fixed deposit accounts than current or savings accounts. These things are not being said, but have come out in the survey reports of FICCI and IBA. According to the report, due to high interest rates, people are now giving more preference to fixed deposits. Due to this, the amount deposited in current and savings accounts has decreased. In the money raised by banks, less interest is charged on the deposit amounts in current and savings accounts. More money deposited in both these accounts means that banks will get better margins. Which gets reduced in fixed deposits.

Increase for people on FD

According to a survey report released on Thursday by FICCI and Indian Banks Association (IBA), people are inclined towards fixed deposits in view of high interest rates. In the current round of the survey, more than half i.e. 57 percent of the people have said that they have reduced their stake in savings and current accounts. On the other hand, in the current period, due to the rise in interest rates on fixed deposits, it has increased its stake.

Increase in demand for long term loans

According to the survey report, there is a continuous increase in long term loan demand in sectors like infrastructure, textiles and chemicals. Food processing and iron and steel have also seen an increase in long term loan distribution in the last six months. According to the 17th round of FICCI-IBA survey, an increase in loan flow is being seen in infra. In the survey, 67 percent people indicated an increase in long term loans, whereas in the previous round this figure was 57 percent.

The survey said that an increase in debt in the non-food industry sector may be seen in the next six months. About 42 percent of the people surveyed expect that the increase in credit in the non-food industry will be more than 12 percent. Whereas in the last round, 36 percent had expressed this possibility.

Reduction in NPA

The survey said that with regard to asset quality, 75 percent of the banks have reported a reduction in their NPA levels in the last six months, whereas 90 percent of the banks had said so in the previous phase. It was said that 90 percent of public sector banks have cited reduction in NPA level, while 80 percent of private sector banks have cited decline in NPA. According to the survey, in the current phase, about 54 percent of the banks feel that the gross NPA will remain between three-four percent in the next six months.