The Reserve Bank of India (RBI) raised the repo rate from 5.25% to 5.50% during its three-day Monetary Policy Committee (MPC) meeting on Wednesday. This comes as good news for fixed deposit (FD) investors as many banks may soon start increasing their deposit rates.
How much interest rates these banks will increase on different deposits is yet to be known. But any small increase in FD interest rates can make a difference to the maturity amount you get, particularly when you deposit a large amount for a long duration. But how much more maturity amount can you actually earn on Rs 1 lakh to Rs 10 lakh deposits if the 6.50% interest rate on an FD rises by 5 basis points (bps), 10 bps, 15 bps, 20 bps or 25 bps?
