2024-04-07 19:19:00
An analysis of the possibility of choosing a long-term deposit fund investment at a high rate of interest.
As widely expected, the RBI has recently announced that the repo rate will remain unchanged. Accordingly, the lending rate to banks remains unchanged at 6.5%. It is noteworthy that for the seventh time, RBI has decided to keep the repo rate unchanged.
Keeping the question of what impact this decision will have on one side, the question of when there will be a change in this trend of RBI also becomes important.
Interest rate
Interest rate trends are cyclical in nature. Interest rates tend to decrease or increase depending on the economic environment. As far as India is concerned, till last few years there was an upward trend in interest rates.
Until February last year, the Reserve Bank gradually raised the repo rate by 250 basis points. As a result, the interest rate on loans increased and the benefit of deposit funds decreased. However, it has kept the repo rate unchanged for the past several months. This continues in the latest monetary policy meeting announcement.
In the current environment, bank deposit fund investment is getting good interest rate benefits.
Although this has been the case for the past several months, there have been questions and predictions regarding interest rate trends as far as investors are concerned.
There were also questions about ‘locking’ investment in deposit funds, as interest rate trends for deposit funds would be determined by the Reserve Bank of India.
Repo rate remains unchanged and economic factors suggest no further interest rate hikes. On the contrary, it was expected that there is a possibility of interest rate cut.
Inflation
In this case, the RBI’s recent decision has strengthened the prediction of interest rate cuts in the coming months.
A poll conducted by the news agency ‘Royders’ had suggested that an interest rate cut could happen by September; The Reserve Bank also said that inflation is under control. This has reduced the possibility of interest rate hikes.
Hence, the chances of a repo rate cut are high in the coming months. In this context, it is considered advisable to invest in deposit funds at the current high interest rates.
If you do this, you can get higher interest rate benefits even if the deposit fund interest rate falls in the coming months. Therefore, it is also considered as the right time to make long-term deposit fund investment.
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