After two years, the round of investing in FD has returned again. It is more beneficial for those investing in short term FDs rather than long term ones as further increase in FD rates is possible. It is expected that the Reserve Bank will further increase the repo rate and CRR to control inflation. At that time also banks can increase the interest rates of FD.
New Delhi. Investing in fixed deposits has always been considered safe. It has been the preferred investment instrument for investors due to the guaranteed return of assured returns. But due to the pandemic, banks were offering low interest on FD for the last two years. Due to the improvement in the economy and increasing demand for loans, the process of increasing the interest rates on FD started from January this year itself.
After this, in the same month, the Reserve Bank decided to increase the repo rate and CRR (cash reserve ratio) after two years to control inflation. The CRR has been increased by half a percent. Due to this, Rs 87,000 crore was reduced from the banking system in a single stroke.
Short term FD more beneficial
This also means that the loanable capital with the banks has reduced so much. Whereas, on the other hand, the demand for credit has increased due to the increase in economic activities. To overcome this shortage of capital, banks are again increasing the interest rates on FDs. After two years, the round of investing in FD has returned again. It is more beneficial for those investing in short term FDs rather than long term ones as further increase in FD rates is possible. It is expected that the Reserve Bank will further increase the repo rate and CRR to control inflation. At that time also banks can increase the interest rates of FD.
Central Bank increased interest on FD
The Central Bank of the public sector has also increased the interest rates of FDs. This increase has been made on deposits up to Rs 2 crore. According to the official website of the Central Bank, the bank is now offering interest ranging from 2.75 percent to 5.5 percent on deposits ranging from 7 days to 10 years. For a period ranging from 1 year to less than 2 years, the bank was earlier giving 5 percent interest. It has been increased by 10 basis points to 5.1 percent.
To senior citizens, the bank is giving half percent more interest on all deposits. Senior citizens are being offered interest ranging from 3.25 percent to 6 percent on FDs with maturity from 7 days to 10 years. After the move of the Reserve Bank, dozens of banks have announced an increase in the interest rates of FD.
