- By Aditya Pratap Singh
- Thu, 10 Apr 2025 11:52 AM (IST)
- Source:JND
The Monetary Policy Committee of the Reserve Bank Of India reduced the repo rate by 25 basis points for the second time in a row, bringing the repo rate to 6% from 6.25%. While addressing the media persons post MPC meeting, RBI Governor Sanjay Malhotra also informed changing of stance to accommodativee from Neutral'signallingng further racutscut this financial year.
While, the move to cut rates brings a lot of positives for common citizens, Like- those who pay EMIs for home or loans loan, will have to pay less amount per month, and people considering taking home, car or personal loans can get it at reduced interest rates- It also hit them in terms of return on their investment as well. Indian investors love risk-free fixed-return investment schemes, making 'fixed deposits' one of the prominent investments, especially amongst senior citizens and people with low-risk appetites.
With RBI's decision to cut repo rates, all major banks most likely be reducing return rates on their fixed deposits soon.
What Should Fixed Deposit Investors Do?
If you are thinking of investing your surplus money in short-term FD schemes then you should be doing so as earliest as you can. In a few days, banks will most likely start reducing rates of fixed deposits for all tenure and RBI's decision to change the stance to accommodativee signals a reduction in repo rate in future as well. In such a scenario the next 10-15 days are high time to maximise your fixed rate return by securing a current or slightly high interest rate.
Small Finance Banks- A destination for high returns on FDs
Investors with a higher risk tolerance can consider putting their money in a small finance bank. These institutions currently offer the highest FD interest rates in India.
However, it is important to be careful. Since it comes under the Deposit Insurance and Credit Guarantee Corporation (DICGC), investment amounts exceeding Rs. 5 lakh should always be avoided. If you have more than Rs. 5 lakh, consider having accounts in different banks or in different names, or having accounts that have the ability to stay within the insurance limits.
