New Delhi: The Reserve Bank of India (RBI) on Wednesday raised the repo rate hike by 25 basis points, again. This is the first hike in repo rate after the Union Budget 2023, however, the Central Bank has effected similar hikes a couple of times last year to rein in spiking inflation. As per available date, the RBI raised the repo rate by almost 2.25% till December 2022.
This rate hike will have a direct bearing on the common man as Housing & Auto loans will get costlier. The raised EMI installments are set to burn more holes in common man’s pockets.
But, the flipside is that this rate hike will bring good outcome for Fixed Deposit (FD) investors. Increase in repo rate will prompt banks to raise interest rate on FDs. As the banks pass the benefits to customers, deposit rates will also rise and the biggest beneficiaries would be those parking their money in FDs.
Financial experts believe that there couldn’t have been a better time than now, to have invested in FDs. The deposit rates of all banks including government & private are running at all time high of about 6-7% or above. With fresh spike in repo rate today, the FD rates may get another push, if the banks choose to pass on the benefits to customers.
A look at latest bank FD rates
Top banks in the public as well as private sector are offering interest range in the range of 3-7%, depending upon the period of deposit. However, for long term deposits, all biggies including SBI, Axis Bank, ICICI Bank, HDFC Bank are providing interest rate of more than 6-7% for 3-5 year period.
In SBI, FD of 2 years accrues an interest of 6.75%, Axis bank FDs earns interest at 7.26%, HDFC bank FDs at 7%, ICICI bank FD at 7% and Kotak bank FDs at 6.75%.
