Can FD rates increase if RBI raises repo rate?
The Reserve Bank of India (RBI) is considering raising the repo rate by 25 basis points from 5.25% to 5.50% in its upcoming Monetary Policy Committee (MPC) meeting, which concludes on October 7, 2026. This potential increase is being considered due to factors such as high inflation, rising crude prices, weak rupee, supply disruptions and a Fed rate hike.
If the RBI does decide to hike rates, it could positively impact fixed deposit (FD) investors, who may see an uptick in FD interest rates in the near future. However, the question remains whether the RBI will raise the repo rate for the first time since December 2022. Retail inflation stood at 4.82% in August 2026, above the RBI's 4% target.
Experts believe that a 25 basis point increase in the repo rate could be a possibility during the October MPC review.
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