FD Rule Change Alert! What Small Finance Bank Customers Must Know Before October 1

FD Rule Change Alert: Your most convenient and safest tool for investment, fixed deposit, is set for a major revamp in October. The Reserve Bank of India (RBI) has introduced new guidelines for small finance banks (SFBs) related to FD and related factors. The new FD changes can restrict Small Finance Banks from offering different interest rates on the same category of retail deposit due to a change of location.

Here is key information about FD rule changes set to kick in from October.

The new changes will be introduced under the RBI guidelines for small finance banks (SFBs) regarding fixed deposit (FD) interest rates and related factors. The changes will come into effect under the Reserve Bank of India (Small Finance Banks-Interest Rate on Deposits) Second Amendment Directions, 2026. These changes will come into effect from October 1.

-The new FD rules will be implemented to bring greater clarity, transparency, consistency and fairness for depositors investing in fixed deposits offered by prominent SFBs across the country.

-SFBs would require to disclose FD rates before offering deposits under the revised framework. SFBs will have to publish their deposit interest rate schedules in advance. The interest paid on regular and bulk deposits must be in accordance with the rates displayed on the bank's websites.

- SFBs are required to release all the interest rates on their websites every business day at 10 am for bulk deposits. A 10 minute grace period would allow updates until 10:10 am.

-SFBs are required to disclose deposit interest rates that should be consistent across all branches and customers. Banks cannot offer different rates for deposits of the same amount that are deposited on the same date at different locations.

-While the RBI has ensured uniformity across regular deposits, SFBs can offer different interest rates on bulk deposits. The difference in FD rates can be based on factors like deposit stability and liquidity requirements under the RBI's regulatory framework.

-Uniform pricing and regulated flexibility for bulk deposits will ensure that the newly introduced framework would help protect depositors while enable banks to manage their funds constructively.

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