Best FD Rates: To control inflation in the country, RBI was forced to increase the repo rate about two years ago. After this, many banks and non-banking financial companies (NBFCs) of the country also started increasing the interest rates of their fixed deposit (FD) schemes. However, during the Monetary Policy Meeting (MPC) on October 9, RBI has decided to maintain the repo rate.
Meanwhile, experts believe that this good time for investors who like FDs may soon end. Because central banks around the world have started cutting interest rates and India can also join this list soon.
This may be the last opportunity for fixed deposit investors to keep their funds safe at the current high rates and take full advantage of this situation. When can the reduction start According to experts, another 50 basis points cut can be seen from the US Federal Reserve in November this year. Therefore, it is believed that RBI will be forced to cut the repo rate in the next MPC meeting to be held in December.
If inflation remains low, then there may be further reduction in rates in FY 2025. When will the interest rates be cut? If the repo rate is cut in December 2024, then the interest rates of FD schemes can be seen decreasing from the beginning of the new year. However, due to strong loan demand and better economic environment, banks may offer competitive deposit rates, which may keep the rates high for some time. What should FD investors do? The present time offers a great opportunity for fixed income investors.
Given the uncertainty in future interest rates, fixed interest rates may prove beneficial for investors instead of variable rate options. Apart from this, the current interest rate cycle is expected to reverse, as interest rates are expected to come down in the coming months, but there is still a possibility of a rate hike in the short-term. Experts believe that interest rates have reached their peak and may start declining soon. When interest rates start coming down, usually short to medium term FD schemes are affected first. After this, long-term FD rates come down.
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