RBI’s 25 bps rate cut signals end of high FD returns; experts urge investors to act now before more cuts

The Reserve Bank of India’s decision on December 5 to trim the repo rate by 25 basis points to 5.25 per cent has set off a fresh recalibration in the fixed-income landscape. This fourth rate cut since February is widely expected to push banks toward lowering fixed deposit (FD) rates in the coming weeks—an unwelcome development for risk-averse savers and senior citizens who rely on stable interest income. Advertisement

“Banks have reduced rates across nearly all tenures, with the sharpest cuts in the one-to-two-year bucket. High-yield FDs have become rare, and another easing cycle will drag peak rates even lower,” said Adhil Shetty, CEO, BankBazaar.

While the change announced by RBI Governor Sanjay Malhotra does not immediately force banks to revise deposit cards, most lenders are expect