2024-08-19 07:53:59
New Delhi: There is bad news for those who invest in Fixed Deposits (FD). The government can cut the interest rates of FD. However, this cut will be for those who invest for a short period (one or two years). Those who invest for the long term will not be affected by this. Till now, there are many investors who make FD for short term i.e. one or two years. A large part of this is the lower middle class. In the last few years, people who invest in FD for short term have suffered a lot. If their interest rates are cut, then short term investors will suffer a lot. The Reserve Bank (RBI) has not made any change in the repo rate. According to the news published in our associate Times of India, it is expected that there will be a final pause before the Reserve Bank starts cutting interest rates. In such a situation, banks can gradually cut the interest rates of FD. Let us tell you that at this time FD is most popular only because the interest rates in it have increased compared to earlier. If banks reduce interest rates, then people will not get as much profit as before and their interest in it will start decreasing.
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Reduction in policy rates may start soon
Raghavendra Nath, MD of Ladderup Wealth Management Private Limited, said that in view of the resilient economic growth, the Reserve Bank will first wait for inflation to come down below the 4% target. Only after this will a reduction in FD interest rates be considered. Although the reduction in policy rates may start soon, it may take some time for banks to reduce their FD rates.
The effect can be seen in a year
Adhil Shetty, CEO, Bankbazaar.com says that fixed deposit rates are likely to increase, as some banks have recently announced hikes. The important thing to note here is that even though there may not be any significant reduction in FD rates in the near future, the cycle of interest rate reduction has already begun. Interest rates may be cut several times in the coming 9 to 12 months.
How to invest in FD
Now the method of investing in FD will have to be changed. Keep a part of your funds in short to medium term FD. At the same time, invest a large part of your portfolio in long term FD. This will give more interest on FD and the investment amount will increase.