Prepay part of your home loan to soften blow of rising interest rates

On the sunny side, FD rate hike is good news for seniors; Go for short-term deposits, roll over to those with higher rates when they mature

The State Bank of India (SBI) raised its fixed deposit rates by 10-50 basis points recently, a move that could prompt other banks to follow suit. This announcement was soon followed by several banks like SBI, ICICI Bank and Punjab National Bank raising their marginal cost of funds-based lending rate (MCLR) by 10-20 basis points. These events mark a decisive turn in the interest-rate cycle. Both fixed-income investors and borrowers need to adapt to this change in interest-rate environment.       

According to experts, banks have been forced to raise deposit rates because liquidity within the banking system