Simple products evoke the most questions. That seems true with my article ‘A fair deal for retail depositors can aid the bond market’ published in Mint on 31 January. The article recommended issuing certificate of deposits (CDs) for up to three years to bank depositors and alluded to benefits that can accrue from doing so. Based on the questions from different stakeholders, this follow-up article expounds the benefits of CDs. To be clear, bank deposits are the most preferred product for retail investors. The objective of my recommendation is to leverage the ‘most popular’ product and not to change any of its attributes for retail investors. Retail CDs can help build an ecosystem that serves every stakeholder’s interests. I will try and explain this through some FAQs.
