The Repo Rate Cut Affect All Banks FD Rates 2017

Fixed deposit investment because of the guaranteed returns has been a choice of masses. But in the current scenario, the deposit rates have drastically dropped resulting in the lower returns on the FD.

Due to RBI’s decision to cut the benchmark rates by 0.25% all banks FD rates 2017 have lowered. If this continues then the purpose of investment will be lost. In such scenario which investment tool one should opt for?

This question may bother most of the fixed income investors and the people who avenge from taking risk. What should be done to yield extra income on the savings. To answer all these questions, one needs to understand the RBI’s future policy. The Monetary Policy Committee (MPC) made a cut as per the market expectation and confirmed its ‘neutral’ policy stance. But the industry experts are predicting of another deduction in the rates by the end of the financial year of 0.25% . The reason why this deduction is expected is the low level of inflation. Nagarajan Murthy, Head-Fixed Income, Tata Mutual Fund, in an interview said that CPI inflation may remain below 4% due to continuous global deflation and a good monsoon.

It won’t be sensible to park much of your saved amount in the fixed deposit if you have set higher financial goals. The less returns will make your efforts insignificant and won’t help you reach your objective. Here as an investor one has to think where to put the money so as it can reap the result as per our future needs. If you are not sure about any other investment instrument then NBFC term deposits are the better option in comparison to Bank deposits.

The prime factor that should be kept in mind while opening the deposit is how much you will be paid back. To make sure that you get the highest rate it is advisable that you compare the all banks fixed deposit interest rates. Open the FD in the bank or financial institution where maximum interest is paid and several facilities such as premature withdrawal, loan against deposit, nomination and auto-renewal are provided. Most Banks offer additional interest to the senior citizen and the option to select the interest payout frequency. The customer can decide whether he/she wants to achieve the interest at monthly, quarterly, half-yearly or at annual rest. The flexibility to receive the interest at the preferable intervals provide regular income to the customer.  

The prime benefit that that FD offers is that you can anticipate your gain. How? Using the FD interest rates calculator you can know how interest will be credited on the deposit of particular amount at the end of the tenure. The calculator is an online device that computes the final value of the deposited amount. On inserting amount, tenure and rate of interest the customer can know what will the maturity value of the deposit. Since all banks pay different interest on various tenure periods. The customer must first check and compare the returns on each maturity and then book the deposit as per his/her financial requirement.