Fixed Deposits To Fetch More Return: Now there is good news for those who keep their hard earned money in Fixed Deposits. More returns are going to be available on FD in the coming days. After the decision of RBI to increase the repo rate by 40 basis points and the decision to increase the CRR (Cash Reserve Ratio) by 50 basis points, banks have started increasing the interest rates on FDs. For those taking loans from the bank, even though the increase in interest rates has brought inflation. But those who keep their deposits in the bank in the form of FD are going to get more returns.
Banks are increasing interest rates on FDs
After the RBI’s decision to increase the repo rate on May 4, many banks have increased interest rates on deposits. In which apart from Bandhan Bank, Kotak Mahindra Bank, Bank of Baroda, ICICI Bank are included. These banks have announced to increase interest rates for retail customers on fixed deposits of different tenors. Kotak Mahindra Bank has increased the interest rates on FDs of 390 days by 30 basis points and on FDs of 23 months by 35 basis points in FD rates.
Decided to increase Bandhan Bank has also decided to increase the interest rates by 50 basis points on FDs with tenor between one year to 18 months and tenor between 18 months to 2 years. Although this is the beginning, it is believed that in the coming times, many banks are going to decide to increase the interest rates to make fixed deposits attractive.
Increased investment in mutual funds due to low returns
In fact, the interest rates on FDs had come down significantly in the last few years. Due to which investors were investing in riskier returns like mutual funds or stock market for better returns instead of keeping money in banks. But for the time being, even though the RBI has increased the repo rate by 40 basis points, but it is likely to increase further in the coming days. In such a situation, interest rates on fixed deposits are expected to increase in the coming days.
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