Fixed Deposit Interest Rate: If the Reserve Bank continues to increase the interest rate to control inflation, then the loan from the bank will be expensive, as well as the interest on the bank’s savings schemes will increase. RBI has increased the interest rate by 190 basis points in 4 meetings of its Monetary Policy Committee.
Mumbai. Since the Reserve Bank of India started increasing interest rates in May this year, almost all banks have increased the interest rate on fixed deposits. The interest rates on FDs have changed in the last 5 months. On Friday, RBI has again increased the interest rates, so customers who have FD in the bank hope that they will also get the benefit of it.
On the other hand, if the Reserve Bank continues to increase the interest rate to control inflation, then the loan from the bank will be expensive, as well as the interest on the savings schemes of the bank will increase. RBI has increased the interest rate by 190 basis points in 4 meetings of its Monetary Policy Committee.
Chances of getting 9% interest if interest rates continue to rise
Suppose 50 basis point increase in rates by RBI means increase in FD rates by banks by equal margin. In this, the FD interest rate will increase from 7% to 7.5%, which means that on a fixed deposit of 1 lakh for 5 years, you will get an additional interest of Rs 3,517 on maturity.
Surprisingly, within just 5 months the interest rates increased tremendously. This has made it seem that if the interest rate hike continues for some more time, then it may reach double digits in the near future. With this, there is a good chance of interest rates on FDs reaching 9%. However, the possibility of 9% interest rate on FDs will depend on how long this rate hike continues. However, within a short span of 5 months, the repo rate has increased significantly by 1.9%.
Many experts believe that there is still room for an increase of 25-60 basis points in the coming 2-3 quarters. When the repo rate was 4 percent, then the country’s largest public sector bank was offering an interest rate of 5.5% on 5-year FDs by SBI. Can increase the FD rate up to 8% for Rs.
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