Bank FD rates soar: Right time for investors to secure peak returns

Small finance banks' FDs yield more than larger banks' offerings, but invest in them sparingly. Investors need to lock into current peak rates before they begin to decline

Several banks like the State Bank of India, Bank of Baroda, and Kotak Mahindra Bank, among other banks have raised the interest rates on their fixed deposits (FDs) in recent weeks. Investors need to lock in at current peak rates before they begin to decline. 

Managing assets and liabilities

The increase in banks’ deposit rates has lagged behind the rise in the repo rate. “The increase in FD rates has been slower and staggered, offering scope for a hike,” says Adhil Shetty, chief executive officer (CEO), BankBazaar.com.

With the Reserve Bank of India (RBI) hiking the provisioning requirement on unsecured loans, banks need