Deposits / Interest Rates

Every RBI rule that touches Deposits / Interest Rates, simplified for bankers. 60 current circulars.

Status from our nightly regulatory-lineage check. Only circulars with no recorded withdrawal appear below — always confirm current applicability against the official RBI source linked on each circular.

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How RBI’s repo-rate change reaches your deposit rates

When the RBI repo rate changes, the headlines focus on loan EMIs — but it also moves what banks pay you on savings and fixed deposits, just more slowly and indirectly. Here is how the change travels to your deposit rate:

1. Start with the policy repo rate. The RBI Monetary Policy Committee sets the repo rate — the rate at which the RBI lends overnight to banks. It is the anchor for the entire interest-rate structure, including what banks are willing to pay you on deposits. Unlike floating loans, deposit rates are not legally bound to the repo rate, so the pass-through is via market behaviour, not a formula.
2. See how lenders react on the lending side first. When the repo rate moves, banks' external-benchmark loan rates reset within a quarter, changing the interest income banks earn. A repo cut squeezes the yield on new loans, while a hike lifts it. That change in lending economics is what eventually pushes banks to re-price deposits.
3. Watch the deposit re-pricing follow. Deposit rates adjust with a lag and bank by bank, driven by each bank's need for funds (its credit-deposit ratio) and competition. After a repo cut, banks usually trim fixed-deposit and savings rates over the following weeks; after a hike, they raise them to attract deposits. The lag means your existing fixed deposit keeps its contracted rate until maturity.
4. Know what is protected and what is not. A booked fixed deposit is locked at the rate on the day you opened it for its full tenure — a later repo change does not alter it. Savings-account interest and the rates on new FDs, however, can move any time. Deposit insurance from DICGC covers up to a per-depositor limit per bank if the bank itself fails, separate from rate movements.
5. Act on the rate cycle as a depositor. In a falling-rate cycle, locking longer-tenure FDs early preserves a higher rate; in a rising cycle, shorter tenures or a deposit ladder let you re-invest at improving rates. Compare the annualised yield, premature-withdrawal penalty and the bank's financial health, not just the headline rate.

This is our plain-English explainer, not RBI text; every rule links to its official page on rbi.org.in. under the editorial review of our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India.

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