A year back deposit rates from good public sector banks was around 9.5 per cent on a 2-3 year deposit. So, chances are you have locked in at extremely good rates, considering that the same tenure would now fetch you a rate of just 9 per cent. Compare bank fixed deposit rates
Why you should not break your deposits?
Firstly, interest rates in the economy are falling and so are deposit rates. In fact, deposit rates have contracted by at least 0.50 per cent over certain tenures in the last 1 year. The RBI is meeting on March 19, 2013, wherein it is widely expected to cut rates again. So, even if the RBI cuts repo rates by 25 basis points, banks could cut deposit rates.
Of course in saying so, it's important to note that banks may not necessarily follow the RBI move and may study their own asset-liability match before deciding on rate cuts. But, broadly interest rates are falling and if you break your deposit and decide after six months to re-invest you are likely to fetch lower deposit rates.
Secondly, if someone has locked-in at higher rates, it's not sensible to break them at all. In fact, if you have the money it's best to invest now, before rates fall further.
Also, if you are investing now, it's best to go in for longer tenures as in a falling interest rate regime, you would have locked-in money at higher rates.
On the other hand if your looking to take a loan, it's best to wait for sometime, as interest rates are falling. Chances are that you would get a chance to take a loan at lower rates.