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Bank FD Rates have peaked now. CRR down from 4.5% to 4%

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SSV

SSV

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RBI' MPC decided that CRR to be cut by 50 basis point from 4.5% to 4% ..
CRR= Cash Reserve Ratio .. ( the cash that need to be kept as a reserve which could not be available for lending )..

This redcution in CRR means the banks now have more funds ( liquidity) for lending from their deposits.. means Banks dont need to pay more interest to get more deposits..

Means: FD rates have peaked .. Book your FDs now for the maximum FD rate.. FD rates may go dwon in future..
An official Repo rate cut is on the cards for Feb meeting ...

All the best ..
 
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sunit123 said:
Recently SEBI took action against them
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Yeah I read that too but it was related to Financial Market product only as they were not licenses for that. But overall I never trust TPA (Third Party Agreegators) and ask everyone to go durectly with banks. I am already having 7 SFBs acc. opened by visiting branch without Aadhaar. If branch not near then open online using Aadhaar but never go with TPAs. Luckily 10 out of 11 SFBs have their branches in Delhi and around in Punjab and Haryana which are almost neighboring states. As told before I kept 5L with quartely interest payout in all 7 SFBs I have savings account with.

Also I always go the savings account route i.e open SA first and then do FD online. Always fund your account via NEFT from your other account. If opening online you can use your account only for initial deposit which varies 5K-10K with different SFBs while some don't even ask for initial funding.
 
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brucelee said:
Hope you are aware that principal and interest incurred till date of default is considered for 5L insurance.
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Already mentioned bro that I have opted for quarterly interest payout so 5L will always be there while in case banks goes down, only a quarter of interest will be at stake. In few banks I opted for monthly payouy which actually discounts or lower the interest rate.

But 5L is paid only when license is cancelled. If RBI restricts a bank opeartion but never cancel their license your 5L is also not safe until they allow you to withdraw or till they merge like in case of PMC which got merged and depositors had to wait for 2 years for their money. But I can bear that much loss and not all banks will go down at once.
 
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surojitlaha said:
Your FD will only be opened with the banks directly. Stable Money here is simply acting as a mediator. It's completely safe, bro.
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How you will know whether TPA has deposited the money with bank and your FD is opened....There are instances where brokers/TPA took money and kept with them and it was only showing in the app that it is invested in MF.
 
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sunit123 said:
So what value these 3rd parties bring on table...You can directly open FD with any bank without any savings account through their website...It is much better option than trusting 3rd parties who might vanish overnight.
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Dedicated RM
Some referral perks
All fds in one place.
Let's assume that the application went bankrupt and vanished, still the fds are with banks. One can easily login to the respective banks mobile or net banking and view the fd details
 
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SSV said:
If Repo rate cut is .5 but banks cut fd rate by 1% that is how it works generally..
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Yes, it can be 0.50% cut in Repo in Feb but banks can't reduce it 1% and that is because banks have deposits at all time lows in FY24-25. Any reduction of such scale will drive deposits more away and make FD look so unacttractive for most people. Sr. Citizens will shift to PPF (7.10%)/SCSS (8.25%) again which will continue to same till March (update will be made tomorrow or Dec 31 by Govt for Jan-Mar quarter).

RBI let go rate cut in Dec as Shashikanta Das term was ending so he didn't want to exit with dent to public. So they let go Dec 0.25% cut and Feb may make it 0.25%+0.25% = 50 basis pts cut. But I am still hoping only 0.25% looking at liquidity and low deposits with banks.

Banks on other hand won't take jerk reaction. A 50 pts cut will make loans 0.25% lower only and FD will continue at 0.50% cut also. So that's how they will manage FD less or equal cut from that of lesser cut in loans.
 
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desiviru said:
Yes, it can be 0.50% cut in Repo in Feb but banks can't reduce it 1% and that is because banks have deposits at all time lows in FY24-25. Any reduction of such scale will drive deposits more away and make FD look so unacttractive for most people. Sr. Citizens will shift to PPF (7.10%)/SCSS (8.25%) again which will continue to same till March (update will be made tomorrow or Dec 31 by Govt for Jan-Mar quarter).

RBI let go rate cut in Dec as Shashikanta Das term was ending so he didn't want to exit with dent to public. So they let go Dec 0.25% cut and Feb may make it 0.25%+0.25% = 50 basis pts cut. But I am still hoping only 0.25% looking at liquidity and low deposits with banks.

Banks on other hand won't take jerk reaction. A 50 pts cut will make loans 0.25% lower only and FD will continue at 0.50% cut also. So that's how they will manage FD less or equal cut from that of lesser cut in loans.
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Yaa i too agree, 1 percent might be too drastic, but we can never predict, I feel government should take decisions in national interest and aim for long term gains, even if it means short term loss for some.
 
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SSV said:
If Repo rate cut is .5 but banks cut fd rate by 1% that is how it works generally..
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Haha .... It's funny how it works just the opposite way when the Repo rate is increased: for each 1% hike in the repo rate banks tend to increase the interest rate by only 0.5% !

In the past few years the repo rate was hiked by 2.5%, but the banks passed on only half of that (~1.25%) in terms of interest rate increase, coolly pocketing the rest!

RBI mildly grumbled from time to time, but the banks just chose to ignore that!
.
 
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