After that, RBI kept the repo rate unchanged at 4% for about two years. In this case, inflation continued to rise for the past few months. Not only in India but the same is the case all over the world.
In particular, since the war between Ukraine and Russia started on February 24, prices of various commodities including crude oil rose and international inflation rose at an alarming rate. As a result, inflation in India also increased.
As a result, the RBI convened an emergency meeting in May and hiked the repo rate to 4.40%. Following this, the repo rate was hiked to 4.90% at the RBI monetary policy meeting in June. As a result, the banks kept increasing the fixed deposit interest.
In this case, the repo rate has been increased to 5.40% in the RBI policy meeting held this month. Due to this again banks are increasing the fixed deposit interest. Interest rates are expected to rise further in the coming days.
Security of money is paramount for senior citizens. Therefore, they avoid risky investments that are not safe. Most senior citizens invest in fixed deposits.
Because there is no risk to the money in Fixed Deposit; Earnings will come at the stated rate of interest. As RBI continues to raise repo interest rates, the cost will increase for borrowers and EMI payers. However, senior citizens can benefit greatly from the higher rate of interest available on fixed deposit schemes.