RBI had also increased the repo rate by 40 basis points last month i.e. on May 4. In this way, within just 36 days, there has been a total increase of 0.90 percent in the repo rate. This simply means that these will be good days for fixed deposit (FD, FD) investors too.
RBI Monetary Policy: After its three-day meeting, the Reserve Bank has increased the repo rate by 0.50 percent i.e. 50 basis points today. This will have a multifaceted effect. On one hand, while loans for common people will be expensive and EMI will increase, on the other hand it will help in controlling inflation.
RBI had also increased the repo rate by 40 basis points last month i.e. on May 4. In this way, within just 36 days, there has been a total increase of 0.90 percent in the repo rate. This simply means that these will be good days for fixed deposit (FD, FD) investors too. People investing in FDs have been seeing a fall in interest rates for a long time.
FD interest rates have decreased by 40 percent in 8 years,
if we look at the data of SBI itself, then in the last 8 years, the FD interest rates of the country’s largest public sector bank have come down by 40 percent. In September 2014, SBI was offering the highest interest rate of 9% on FDs. In May 2020, it came down to 5.4%. The occurrence of interest rates in FD is a big setback for senior citizens because it was only with this interest that many used to manage their monthly expenses.
Now interest rates on FD will increase
Due to the increase in the repo rate for two consecutive times, the interest rates on FD will again increase. On this basis, if there is an increase of 90 basis points in the FD interest rate, then the interest rate will increase from 5.5 percent to 6.4 percent. Calculating on this basis, on FD of Rs 1 lakh for 5 years, you will get additional interest of Rs 5958 in the end.
Although loans become increasingly expensive whenever the policy rate hikes, FD interest rates increase gradually. Banks raise interest rates on FDs late. One of the reasons for this is that banks do not have enough cash and do not stay in too much hurry for FDs.
