Should you book your fixed deposit now or wait for the rates to rise further?
According to a recent update on December 7, 2022, when the Reserve Bank of India (RBI) increased the repo rate by 35 basis points, the repo rate climbed to the 6.25% mark.
According to a recent update on December 7, 2022, when the Reserve Bank of India (RBI) increased the repo rate by 35 basis points, the repo rate climbed to the 6.25% mark. In order to combat inflation, the RBI has increased the repo rate by 225 basis points since May, reaching 6.25% in FY23. The repo rate is intrinsically linked to the loan and deposit rates that commercial banks provide to retail investors since it is the interest rate imposed when commercial banks borrow money from the RBI. As a result, banks would raise their lending rates to reflect a rise in the repo rate and bring it on to individual investors. Almost all of the banks have increased interest rates on their fixed deposit products as a result of the RBI's five consecutive hikes to the key lending rate. Analysts believe that the MPC may raise interest rates again in February 2023 before taking a break from rate hikes because, at its meeting in December, the MPC also decided to continue focusing on the withdrawal of accommodation to ensure that inflation remained within the target going forward while promoting growth.