Fixed deposit interest rates

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What will happen to fixed deposit interest rates if home loan interests rates are lowered in India to the tune of 2-3% per annum?

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All financial factors are related to one another. If one factor is changed, all other percentages automatically get affected. If the home loan interest rate is lowered by 2-3% per annum, it indicates that inflation has increased.

So to control the situation RBI will increase the repo rate (the rate at which banks borrow money from RBI). This in turn, will force the banks to reduce the fixed deposit interest rate.

So, if you have to pay less interest rate at home loan, you will also get less interest in fixed deposit.

Roy, 

Niw banks moved to MCLR frim april 16 onwards.one of the main component of MCLR is marginal cost if funds.Banks have mclr fir 14 days monthly, half yearly, yearly

The lending rates are connected with the 

1,Deposit cost

2,CRR impact

3,tenor premium


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