When you invest in any fixed income instrument check whether the interest is :
Monthly Compounding or
Quarterly Compounding or
Semi-Annual Compounding or
Annual Compounding
As the maturity period is long there make huge difference with if the compounding is monthly/quarterly instead of Annual
If you invest Rs. 100000, Rate of Interest is 12% then the maturity value after 5 years will be in different scenarios :
Compounding
| Year | Annual | Semi Annual | Quarterly | Monthly |
| 5 | 176234 | 179085 | 180611 | 181670 |
So if you have to choose out of two instrument with same level of safety then chose the instrument which has monthly/quarterly compounding
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