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What will be the impact on your FD if the Repo Rate increases?

If the RBI increases the Repo Rate, the impact on your FD depends on the bank and the type/tenure of the FD: New FD: Banks may increase FD interest rates, so you could get a higher return on a new FD. Existing FD: Usually, the interest rate does not change. You continue to earn the rate at which you booked the FD until maturity. FD renewal: If FD rates are higher when your FD matures, you may get a better rate when you renew it. Floating-rate FD: Its interest rate can change with market rates, but such FDs are less common. Example: If you have a ₹5 lakh FD for 2 years at 7% interest, and the Repo Rate increases, your existing FD will generally continue at 7% until maturity.

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