Big News for Fixed Deposit Investors: Interest Rates May Decrease
A report by SBI Research has raised concerns about a possible decrease in fixed deposit (FD) interest rates, causing worry among investors. Some banks currently offer up to 9 percent interest on FDs for senior citizens, but that rate may decrease.
Repo Rate Unchanged, FD Rates Buzzing
Following the Reserve Bank of India’s (RBI) decision to keep the repo rate unchanged at 6.5 percent, the interest rates for FDs have been in the spotlight. Economic experts predict that the interest rate may decrease due to increased deposits in banks, but the extent of the decrease remains uncertain.
Senior Citizens May Not Benefit This Year
SBI Research’s report highlights that while banks have hiked FD rates for senior citizens in the last two years, the chance of an increase this year is slim. The report suggests that an increase in bank deposits could lead to further interest rate hikes in the future.
FD Rate Increase in 2022
The RBI raised the fixed deposit scheme rate significantly in 2022 after raising the repo rate by a total of 2.5 percent. Since then, the repo rate has remained at 6.5 percent from February 2023. Senior citizens have benefited from 25075 basis points above the rate for general customers in the last two years.
FDs Remain Popular for Risk-Free Investments
Despite the risks associated with investing in shares and mutual funds, fixed deposits remain a popular choice for risk-free investments. They offer guaranteed returns and are the most popular investment in India. Many banks also offer high interest rates on fixed investments.
List of Banks with High Interest Rates on Fixed Investments:
– State Bank of India: 6.1%
– HDFC Bank: 6.25%
– ICICI Bank: 6.5%
– Axis Bank: 6.5%
– Kotak Mahindra Bank: 6.5%
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