Will fixed deposit (FD) interest rates move higher if the Reserve Bank of India (RBI) raises the repo rate from 5.25% at the end of the three-day Monetary Policy Committee (MPC) meeting on Friday (June 5, 2026)? Or will the RBI retain the repo rate for the third time in a row, leaving little space for banks and small finance banks (SFBs) to increase FD rates?
Rising inflation due to high fuel and gas prices and a weak rupee against the US dollar are the factors which are becoming difficult to ignore with each passing day. These factors have raised expectations of many FD investors that RBI may increase the repo rate for the first time after December 2022. But what do the indicators suggest? And what do the other factors playing a role in FD rate hikes indicate?
