Good News! Investors In Fixed Deposit Will Benefit From RBI Decision, Know How

The Reserve Bank of India (RBI) has decided not to make any changes in the repo rate in the meeting of the Monetary Policy Review (MPC). For the third time in a row, the RBI MPC kept the interest rates stable in the meeting. Economists were expecting the same thing amid rising inflation. Experts say that RBI has taken the decision as expected. Monetary policy review has given rise to economic growth rather than inflation. This also indicates that the main factor for increasing inflation is the supply side. The liberal attitude of RBI regarding liquidity will ensure that there is no shortage of money in the current recovery.

After a three-day meeting on Friday, RBI Governor Shaktikanta Das said, ‘RBI has kept interest rates stable for the third consecutive time. There is no change in the benchmark lending rate. It stands at the rate of 4 percent.

How will FD investors benefit

After this decision by RBI, now the repo rate and reverse repo rate are retained at the rate of 4 percent and 3.35 percent respectively. No change in policy interest rates is good news for those saving through Fixed Deposit. Banks will not take further decision to reduce interest rate on FD. State Bank of India has not made any changes in FD rates since September 2020. Currently, this bank is paying interest ranging from 2.9 per cent to 5.4 per cent on FD.

What will be the effect on those depositing money in the bank?

Banks also reduce FD rates in the coming days after policy interest rates are cut by RBI. However, this reduction in deposit rate is not in proportion to the repo rate. As a money depositor in the bank, the reduction in interest rates means that less interest will be received on new deposits in the account. Less interest means that the depositor’s deposit will also get less returns. Increasing the interest rate means that there will be more return on the deposit.

EMI is not expected to decrease

Shaktikanta Das said that the central bank is committed to protecting the interests of the depositors in the financial system. Now no change in repo rate means that the EMI of the loan is not going to decrease at the moment. Let us tell you that since March this year, the central bank has cut the policy rates by 115 basis points. The last RBI made a change in policy interest rates on 22 May.


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