RBI Policy Repo Rate: Will FD Rates Hike Or Fall In October? SBI vs HDFC Vs ICICI Bank, Check Best FD Rates

Markets and experts are predicting RBI to hike policy repo rate by 25 basis points to 5.5% on October 7, 2026. If RBI hikes key interest rates on Wednesday, it will mark the end of their 11-month long dovish stance. However, the RBI rates decision will directly impact banks fixed deposit rates. The reason? They are interlinked to each other.

Will RBI Hike Repo Rate On October 7?

"With inflation remaining an important consideration, the upcoming MPC meeting will be closely watched, with the possibility of a 25 bps rate increase also being discussed," said Puja Abhishek Singh, CEO, Manipal Fintech.

Along the similar lines, Saurabh Jain, Co-founder & CEO, Stable Money said, "With inflation moving higher in recent months and pressures becoming more broad-based, the October MPC meeting will be closely watched. A 25 bps point increase in the repo rate is increasingly being expected, which would take the rate from 5.25% to 5.50%. The RBI's assessment of the persistence of inflation, along with the resilience in economic growth, will remain important in determining the policy stance."

Will Rate Hike Impact FD Rates?

As per Jain, a potential rate hike could create an opportunity to lock in relatively attractive rates across fixed income products such as FDs and bonds.

For FD savers, Singh added that higher-rate environment could offer an opportunity to earn better returns on deposits, although the impact may vary from bank to bank.

How Does Repo Rate Impact FD Rates?

The repo rate is the interest rate at which the RBI lends money to commercial banks. Changes to this rate impact the interest rates banks offer to their customers, as per DCB Bank's blog. Here's the rate hike or rate cut impact on FD rates.

Rate Hike: A rise in the repo rate often leads to higher FD interest rates, meaning your savings earn more over time.

Rate Cut: Banks can borrow from RBI at a lower cost. So, comparatively the rate to be paid by the Banks to the RBI is lower, so in this case FD interest rates may get reduced.

Should You Choose Fixed Deposits Scheme After RBI Policy In October?

The investment decisions should not be driven only by expectations around the next rate move. Investors should consider their financial goals, investment horizon, liquidity requirements and the underlying credit risk before choosing an instrument. In a changing rate environment, maintaining a diversified fixed income allocation and matching the tenure of investments with financial goals can help investors navigate different interest rate cycles with greater predictability, as per Jain.

Check Latest FD Rates:

SBI FD Rates Latest

The largest PSU bank is offering 3.05% to 6.40% interest rates on FDs below Rs 3 crore to general category. While senior citizens can earn interest rates in the range of 3.55 to 7.05%.

HDFC Bank FD Rates Latest

For FDs below Rs 3 crore, HDFC Bank is offering interest rates of 2.75% to 6.50% to general category, while rates vary from 3.25% to 7.10% to senior citizens. The tenues range from 7-days to 10 years.

ICICI Bank FD Rates Latest

ICICI Bank's popular FD scheme is offering 6.5% rate to general category on tenures like 3 Years 1 Day to 5 Years and 5 Years 1 Day to 10 Years. Senior citizens get from 7% to 7.1%. The lowest FD rate is of 2.75% on 7-14 days tenure to general individuals and 3.25% to elderlies.

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