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Monday, January 17, 2022

FD investors can soon be different – you have also invested, so know what to do now

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There has been a big drop in FD rates in the last 6 years. Due to the COVID-19 pandemic, it has also been double killed. But now experts say that in the coming months, it will see an increase.

In the coming times, the interest rates of fixed deposits may increase.

Due to the COVID-19 pandemic, retail depositors have been hit twice in the last one year. Not only did he have to go through a period of low interest rates, but inflation has also hit his savings. This is the reason that the returns through fixed deposits in 2020 were extremely limited. But, in 2021, this situation may change now. According to experts, now is the time to get better returns on FD. So let’s know why the experts are guessing this.

In 2020, the Reserve Bank of India kept policy rates low throughout the year. The same has been seen in the first three months of 2021. Darsal, RBI wanted that in this era of crisis there should be sufficient liquidity in the banking system so that the pace of economic growth can be increased. Extra liquidity also means that interest rates will remain low. Banks, on the other hand, were cautiously giving credit to all sectors. This also means that the demand for funds by banks has been low. This is the reason that interest rates on deposits were low.

FD interest rates fell sharply in last 6 years

The last six years have been good for the Indian equity market. But between January 2015 and May 2020, the Monetary Committee of RBI has brought down the policy interest rates from 8 per cent to 4 per cent. This has affected the investment of FD investors. In FY 2014-15, FDs of 1 to 3 years were around 8.5-8.75 per cent, which has now come down to 4.9-5.5 per cent.

The improving economic situation will have a positive effect

However, the financial situation is expected to improve in the financial year. Its positive effect will also be seen on FD returns. Interest rates are going to rise now after coming at the low level of the last decade. After April 2020, rising retail inflation has put the RBI on the brakes to cut policy interest rates. Apart from these factories, there have been some such announcements in the budget, due to which interest rates can be seen rising.

Bank’s / NBFC’s


Current fd

The rates

Of senior citizens

FD rates for

Last time


How changed

The rates

ACBI 2.90%-5.40% 3.40%-6.20% 8 January 2021 Rose 0.10% on 01-year FD.
Canara Bank 2.95%-5.50% 2.95%-6% 8 February 2021 Increased 0.20% over 2 years FD
Bajaj Finance 6.15%-7.00% 6.40%-7.25% 1 February 2021 Increased 0.40% on FDs from 36 to 60 months
ICICI Bank 2.50%-5.50% 3.00%-6.30% 21 October 2020 Increased 0.80% for seniors

Source: myloancare.in

A boom in economic growth means that deposits will be required to lend to banks. Therefore, they should offer better interest rate. Recently, SBI has increased the interest rates on 1-year FD. Other banks are expected to do the same.

What should you do as an FD investor?

Many global firms and experts have questioned the RBI’s lenient attitude towards the economy. In the current state of the economy, indicators suggest that deposit rates are going to increase from the second half of FY 2021-22. Till then, experts say that depositors should continue to maintain their money in short-term FDs. At present, the benefit of keeping FDs in the short term will be that as soon as the rates increase, the investors will be able to invest in higher interest periods.

Also read: Electricity has also given the current of inflation! How expensive will the cooler-AC air supply cost from April 1, how will the money be saved?

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Bhagyashree Soni
Bhagyashree Soni is a software engineer with soft writing skills. She is a degree holder from the International School of Entrepreneurial Leadership. She has been a state-level badminton champion and chess player. A woman with a forthright attitude enjoys her writing passion as her chosen career. Writing in the context of feminism, social-cause and entreprenurship is her forte.
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