After the RBI cut the repo rate consecutively third time in a row. The speculation and doubt that everyone raised is that Is the benefit of the rate cut really going to pass on to the customers? Will banks cut their interest rate? And what will be the next move of the bank.
So, now the top private banks have cut their deposit rates by 0.25 basis point. After the RBI rate cuts, every private bank has reviewed the interest rates on the deposits and fixed deposits. As a result, ICICI Bank have cut the interest rate on deposits by 0.25% and Axis bank after reviewing their interest rates have decided to cut the interest rate on deposits by 0.15%.
It’s generally a well-known fact that the cutting of interest rates on deposits is seen as a precursor to a cut in the lending rate. After these rate cuts, now the question is how much the banks will cut their lending rate to the customer?
For this we will have to wait and watch.
The banks have also revised interest rates on fixed deposits. This cut in interest rates on fixed deposits will be valid with effect from June 17, 2019. ICICI bank has revised their interest rate on FDs and made certain changes. According to the bank website, on FDs with maturity period of 7-14 days the rate of interest is 4%, while for 91-120 days it’s 6%.
Fixed deposits are one of the most popular ways to save money. And generally interest rates are higher than interest rates in the saving account. It is also a secure investment as this offers a guaranteed return. They are very easy to open. FDs are also called term deposits.
The bank has decided not to make any change on the interest rate for FDs maturing between 185-286 days, thus the rate of interest stands at 6.25%. Also, the bank has increased interest rate on the FDs maturing between 290 days to 1 year from 6.50-6.75%. For the FDs maturing within 2-3 years, the bank has increased interest rate from 7.3-7.5%.
Also for the long term FDs whose maturity period is 2 year 1 day up to 3 years is 7.30%, from 5 year 1 day to 10 years it is 7%, from 3 year 1 day to 5 year is 7.25%. And the interest rate for 5-year tax saver FD maximum up to 1.5 lakh is 7.25%.
Senior citizens will continue to get extra 0.5% on their deposits.
Now every one is looking up to the next step that banks would take to cut the lending rates. So that that the EMI (Equated Monthly Instalments) of people who has taken loan will get reduced.