Stick to shorter-term FDs to gain from rising-rate scenario: Experts

Avoid auto-renewal facility so you can select best tenure and slab rate

The Reserve Bank of India (RBI) began its battle against inflation with an off-cycle hike in key policy rates on May 4. Taking a cue, banks such as Kotak Mahindra Bank, Axis Bank, Punjab National Bank, and non-banking financial companies (NBFCs) such as Bajaj Finance, and several others, have hiked interest rates on fixed deposits (FDs).

How much more can rates rise?

“The repo rate is expected to increase by another 75-100 basis points (bps) over the next 12 months. FD rates should also follow a similar trajectory and rise by 60-80 bps over this period,” says Vibhor Mittal, chief business officer