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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