The way banks offer and disclose the deposit interest rates is going to witness a change from October 1 as the Reserve Bank of India (RBI) has overhauled the rules.
“Interest rates payable on deposits, including bulk deposits, shall be strictly as per the schedule of interest rates disclosed in advance on the bank’s website. However, interest rates payable on bulk deposits shall be disclosed on the bank’s website at 10:00 am with a grace time of 10 minutes, latest by 10:10 am, on each business day,” RBI said in its circular.
It means that the interest rates disclosure will be more transparent and the customers will be able to know the rates in advance. They are expected to make FD pricing more transparent for customers while giving banks greater flexibility in setting rates for bulk deposits.
The directions will apply to commercial banks, small finance banks, regional rural banks (RRBs), local area banks, payment banks and urban cooperative banks.
What new rules mean for the FD investors?
The new Fixed Deposit (FD) rules will bring more transparency for the investors as they will be getting the realistic rates on the banks’ website in advance, helping them to take decision.
RBI in its circular has said that the interest rates offered on deposits, including bulk deposits, shall be uniform across all branches and for all customers and there shall be no discrimination in the matter of interest paid on the deposits, between one deposit and another deposit of similar amount, accepted on the same date, at any of its offices
Will FD rates change from October 1?
The new rules does not necessarily lead to any change in the interest rates.
RBI’s circular has only mandated the display of the interest rates on the Fixed Deposits and not any capping on the bank rates offered on the FD.
Interest rates payable on deposits, including bulk deposits, shall be strictly as per the schedule of interest rates disclosed in advance on the bank’s website.