RBI Repo Rate Cut: New FD Rates to Drop, Existing FDs Safe

• RBI reduced the repo rate by 25 basis points to 5.25%, maintaining a 'neutral' stance.
• This rate cut is expected to lead to lower interest rates on new and renewed Fixed Deposits (FDs).
• Existing FDs will not be affected, as their interest rates are locked for the entire tenure.
• Short-term FDs (3-12 months) are likely to see rate reductions first due to improved liquidity.
• Experts advise depositors to consider locking in FDs soon or using strategies like FD laddering to manage returns.

Why It Matters: RBI rate cut will decrease returns on new FDs, affecting savers.