Offers
Rates
V-KYC
Debit Card Related
Credit Card Related
SA Welcome Kit 
Manage Mandate(s)
Get Mini Statement
categories
Bloggers
Blog collection
Press Release
Will FD Rates Increase in 2022?
Posted on Monday, June 20th, 2022 | By IndusInd Bank
When the pandemic hit the world 2 years ago, there was panic among Central Banks around the world to come up with strategies to stimulate their respective economies. As a reaction, most Central Banks announced cuts in their respective benchmark rates, making it easy for people to borrow money. Today, the tables have turned.
Amid rising inflation caused by increased economic activity and rising oil prices, Central Banks are now under pressure to raise their benchmark rates once again in hopes to stabilize their economies. India is no different.
In its most recent monetary policy review, the RBI announced that it is raising the repo rate, the benchmark lending rate in India, by 40 basis points to 4.4%. Not only this, in its upcoming monetary policy review in June 2022, it is expected that the RBI will raise this benchmark rate further.
As the lending and deposit rates are impacted by the repo rate, banks will also make adjustments to their interest rate schedules. This article discusses the impact of this chnage on fixed deposit rates in 2022. Read on.
What does the increase in repo rate mean for fixed deposit rates?
Repo rate is the interest rate at which the RBI lends money to commercial banks in India when they are short of funds. This rate acts like a benchmark for all other interest rates set by banks as it directly impacts their cost of funds.
This increase in repo rate means that banks will most likely revise their lending and deposit rates upwards. This is great news for depositors as they will get higher rates on their deposits but not so much for borrowers.
So what does all this mean for fixed deposit rates? Most of the banks will now revise their fixed deposit rates to a higher limit. Having said that, whether a bank chooses to do so or not and by how much depends solely on their business calculations and discretion.
How much hike in fixed deposit rates can be expected?
Again, it varies from bank to bank. If you are looking to invest in fixed deposits, you should definitely see if your bank has announced a hike in its fixed deposit rates. If you are looking to earn some of the highest FD interest rates in India, you can always check out fixed deposits by IndusInd Bank.
Conclusion
So, to conclude, the recent increase in repo rate will be beneficial for depositors as they can now expect to earn higher fixed deposit rates. Be on the look-out for the next money policy by the RBI scheduled for June. If RBI does announce another rate hike, which it most likely will, depositors will have more to cheer about.
If you are looking to apply for a fixed deposit only that offers attractive interest rates, do check out fixed deposits by IndusInd Bank right here.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
