FD Interest Rates: Indian investors like to make fixed deposits in banks, but it is once again becoming a loss deal and the interest on it is coming down…
Even after increasing retail inflation for the last 1-2 months, the Reserve Bank has not made any change in the repo rate for the third time in a row. Meanwhile, banks have started reducing interest rates on fixed deposits. It seems that the best days of bank FDs are over.
No change even for the third time
The meeting of the Monetary Policy Committee of the Reserve Bank which ended today began on 8 August. This was the third meeting of the MPC of the Reserve Bank in the current financial year. The Reserve Bank had earlier kept the repo rate unchanged in the MPC meeting held in April and June 2023. In this way, the repo rate has not been changed even in the third consecutive meeting.
Increase in repo rate throughout the year
Before that, the Reserve Bank had increased the repo rate by 2.50 per cent in a gap of about a year. Due to the continuous increase in the repo rate, while on the one hand home loans to personal loans and auto loans were getting costlier, on the other hand, banks had started increasing the interest paid on savings accounts and fixed deposits. Due to the stop of increase in the repo rate, the phase of increase in FD rate has also stopped.
These two banks reduced the interest so much
Now banks have also started reducing FD rates. At least 5 banks have reduced interest rates on FDs during the last 2 months. Axis Bank has cut FD rates by up to 0.10 percent. The new rates have come into effect from July 26. Similarly, the second largest public sector bank PNB has cut the FD rate by 0.05 percent. The new rates of PNB have become effective from June 1.
Maximum deduction of PNB
Bank of India has cut FD interest by the maximum up to 1%. The new interest rates of Bank of India have come into effect from 28 July. IndusInd Bank has reduced FD interest rates by 0.25 percent from 5 August. At the same time, AU Small Finance Bank has reduced the interest rates by 0.85 percent.
Now more banks can cut
After keeping the repo rate constant in the MPC meeting that ended today, the rest of the banks may also reduce the interest rates on FDs in the coming days. It is clear that the days of decent interest on FD have passed again and in the coming time people are going to get less return from FD.
