Reserve Bank of India (RBI) After about 5 years, the repo rate has been reduced by 0.25% to bring it to 6.25%. After this, the market is hot that all loans including home, car loans will be cheap and interest rates will be cut on fixed deposits. However, a lot of experts believe that this is not going to happen immediately. Experts say that if we look at the previous track record, banks took a long time even after the RBI cut. Not only this, the full advantage of the deduction made by the RBI did not pass its customer. Due to this, this time it cannot be expected that the banks will give the benefit of this deduction to their customers immediately.
Banks are struggling with lack of liquidity
Many experts say that despite the efforts of RBI, most banks are struggling with lack of liquidity. Therefore, he will not take any such step that people reduce the FD. Therefore, there is no possibility of a decrease in interest rates on FD immediately. Yes, if RBI makes one more cut in the next policy, then there may be a decrease in interest rates on FD. The first short -term interest rates will be cut on FD. There will be no major change on long -term FDs.
Surprise to get short term FD
Experts say that it is prudent to get FD for 1 to 3 years. Even if the banks reduce interest rates in the coming days, they will first do it on short term FD. Therefore, it will be beneficial to get FD done in time. Investors should note that the deduction of the recent 25 basis points by the RBI is a sign of separation from the last four -year high interest rate environment. This period saw an increase in interest rates continuously, which led to an increase in credit rates, as well as fixed deposits (FD) for the savings. To attract deposits between rising borrowing costs and maintain liquidity, banks had to offer high FD rates.
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