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How to Deposit Money (>5L) Safely in Bank?

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EnthuCC

EnthuCC

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I saw a post of IDFC bank stock price which has been fallen ~ -29% in last 1 year. Apparently the bank had disappointing last two quarters.

How do I get assurance that depositing money in IDFC or in any other bank is safe or not? The DIGC insures amount only up to 5L only. Where do people with more than 5L in liquid money keep their money safe?

The recent news of Yes bank and some co-operative banks defaulting ruined many lives of their depositers.

What's the red flag which a depositor shall observe and move funds to a safer bank before any banking crisis occurs?
 
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NikhilG said:
What is rbi retail?
And point 2 or 3 is these bank stocks or in bank sa/fd?
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1-(Govt of India)Sovergien Bond issued to Retail Directly under Non Competitive Bidding(Bond Duration - 90 days to 50 years duration)
2-Bank
3-Nifty 50 cover rest

Today's auction rate of T Bills
 

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NikhilG said:
My concern is slightly similar, my friends want to park his life long savings ( he is 40) in a bank. He wants to park 1.5 crore in a bank and he needs maximum interest. He doesn't hold any gold, equity or property. He says he hate doing job and he wants to ensure he can live peacefully with bank interests( be it fd or savings account). Is any commercial bank or sfb safe for him? I suggested him to diversify in 10 different banks but he says he as OCD to keep and track it from 1-2 places only. What should he do?
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Keeping 1.5Cr in 1 or 2 busket is very very risky thing. And if it's lifelong savings for the rest of the life of a 40 years old, it's much more risky.

I think he should consult a proper financial advisor for proper financial strategies. Friendly advice won't work for him.

Overall Life long savings in *A Bank Account* is a bad idea in it's own.

PS:
1. for example let's assume SBI is the safest and it's providing high enough rate(let's assume only 😆) he keeps all there.
And in a sudden a medical emergency comes in the family and in that very day their server is down.

2. Note bandi like situation: assume only allowed to withdraw 5k/2k from a bank a day

3. COVID like situations

4. Combination of any two or three of the above situations but not limited to there.

I know these are special situations, may not happen in ages! But if you want to depend on a fixed corpus. You should consider these situations.
My take: It's not like "He should "
He must have to diversify to be able to have a good life otherwise consequences follows.
 
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sunit123 said:
Financial adviror is the last person in the world to consult...they will only suggest products where they get commission
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That is also a problem.
But I think he should not invest through advisor he should only consult how to manage by giving fees. Don't ask for product. Ask for the ways or disciplines.
Everything he himself have to manage that way he can get maximum benifits.
 
cardy said:
Keeping 1.5Cr in 1 or 2 busket is very very risky thing. And if it's lifelong savings for the rest of the life of a 40 years old, it's much more risky.

I think he should consult a proper financial advisor for proper financial strategies. Friendly advice won't work for him.

Overall Life long savings in *A Bank Account* is a bad idea in it's own.

PS:
1. for example let's assume SBI is the safest and it's providing high enough rate(let's assume only 😆) he keeps all there.
And in a sudden a medical emergency comes in the family and in that very day their server is down.

2. Note bandi like situation: assume only allowed to withdraw 5k/2k from a bank a day

3. COVID like situations

4. Combination of any two or three of the above situations but not limited to there.

I know these are special situations, may not happen in ages! But if you want to depend on a fixed corpus. You should consider these situations.
My take: It's not like "He should "
He must have to diversify to be able to have a good life otherwise consequences follows.
Click to expand...

cardy said:
That is also a problem.
But I think he should not invest through advisor he should only consult how to manage by giving fees. Don't ask for product. Ask for the ways or disciplines.
Everything he himself have to manage that way he can get maximum benifits.
Click to expand...
+1,
Very well said.
Free Advice is always worthless, ONLY few understand.

Different strategies, different flexibility, different mindset, different risk management and beyond all
"Mindset of Satisfaction Level "
It's not attainable by everyone.

Imagination and reality of Financial World is different, every 10 years of age attainment, perspective changes, realisation changes.
 
cardy said:
Keeping 1.5Cr in 1 or 2 busket is very very risky thing. And if it's lifelong savings for the rest of the life of a 40 years old, it's much more risky.

I think he should consult a proper financial advisor for proper financial strategies. Friendly advice won't work for him.

Overall Life long savings in *A Bank Account* is a bad idea in it's own.

PS:
1. for example let's assume SBI is the safest and it's providing high enough rate(let's assume only 😆) he keeps all there.
And in a sudden a medical emergency comes in the family and in that very day their server is down.

2. Note bandi like situation: assume only allowed to withdraw 5k/2k from a bank a day

3. COVID like situations

4. Combination of any two or three of the above situations but not limited to there.

I know these are special situations, may not happen in ages! But if you want to depend on a fixed corpus. You should consider these situations.
My take: It's not like "He should "
He must have to diversify to be able to have a good life otherwise consequences follows.
Click to expand...
The thing is he says that he feels more comfortable and liquud with the savings account than fd, and he says that usually in savings upwards of 25 has max interest so doesn't make sense to first use 25 lacs in two bank and achieve slab rate
 
hender said:
If he is comfortable why you and we are bothering TOO much

Let him enjoy his F.I.R.E. life
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People do what they want to do and they would like to listen (affirmation) what matches with their thought process. You should advice only those who are willing to accept and explore new ideas.
 
sunit123 said:
People do what they want to do and they would like to listen (affirmation) what matches with their thought process. You should advice only those who are willing to accept and explore new ideas.
Click to expand...
A simple FIRE (Financial Independence, Retire Early) strategy involves living frugally, saving a large portion of your income, and investing those savings wisely. The goal is to accumulate enough capital to cover your expenses without needing to work. This is often achieved by reducing spending and prioritizing investments with moderate to high yields, aiming to reach a "FIRE number" (approximately 25 times your annual expenses).

Key Components of a Simple FIRE Strategy:
  • Living Modestly: Reduce non-essential spending and focus on needs rather than wants.

  • Saving Aggressively: Aim to save a significant portion of your income, often 50% or more.

  • Investing Wisely: Choose investments that have the potential for growth and returns, such as stocks, bonds, or real estate.

  • Tracking Progress: Monitor your savings and investments regularly to ensure you are on track to achieve your FIRE goals.
Additional Considerations:
  • Calculate Your FIRE Number:
    Multiply your annual expenses by 25 to determine the amount you need to save and invest.

  • Consider Your Time Horizon:
    The shorter your time horizon, the more aggressive your investment strategy may need to be.

  • Seek Professional Advice:
    Consult with a financial advisor if you need help with specific investment decisions or strategies.
By following these principles, you can build a simple and effective FIRE strategy to achieve financial independence and retire early.

AI: may help more 😉
 
hender said:
If he is comfortable why you and we are bothering TOO much

Let him enjoy his F.I.R.E. life
Click to expand...
the thread and discussion could help lot many people that we can imagine. Someone who wants to retire early would need liquid funds coming every month for expenses. Equity could not be the answer here and FD attracts 10 percent tds plus more than 10 lac (they inform income tax department about it)
Savings interest give lot better control where you can yourself pay your taxes while filing ITR.

One workaround could also be 7 lac fd in every bank so that the accumulated interest in every bank is less than 50k.
 
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