The RBI raised the repo rate by 0.25 percentage points to 5.50% on 7 October 2026, its first hike in nearly four years. If you have money to put in a fixed deposit, the natural question is whether FD rates are about to rise, and whether you should wait. The short answer: most big banks had not raised FD rates by mid-October, the SBI chairman reportedly expects them to hold for a couple of months, and waiting has a cost too. A simple ladder lets you avoid guessing.
Rates below are as reported in mid-October 2026. Check your bank's site before booking, because these change without much notice.
What the repo hike does, and does not, do to FD rates
The repo rate is what the RBI charges banks for short-term money. When it rises, loans tend to get dearer quickly, especially floating-rate home loans linked to the repo rate. Deposit rates are different. As Upstox put it, "the repo rate hike does not automatically mean that deposit rates will increase by the same amount." Each bank decides based on how much money it needs to raise.
Two things stand out from this cycle so far:
The MPC also changed its stance to "calibrated tightening," the first such shift since October 2018, according to Goodreturns. That signals the RBI is open to more hikes, though nothing is promised.
SBI Chairman C S Setty reportedly indicated that banks "may not raise deposit rates over the next two to three months," citing comfortable liquidity, according to Upstox's roundup of bank FD rates.
One more point that often gets missed: your existing FDs do not change. An FD keeps the rate it was booked at. Any increase applies only to new deposits and renewals.
Where FD rates stand in mid-October 2026
For deposits below ₹3 crore, general (non-senior) customers, as reported:
SBI
1 year to under 2 years: 6.25%
2 years to under 3 years: 6.45%
3 years to under 5 years: 6.30%
Amrit Vrishti (444 days): 6.60%
HDFC Bank, ICICI Bank, PNB and Bank of Baroda
1 year: 6.25% at all four.
3 to 5 years: 6.50% at HDFC and ICICI, about 6.30% at PNB and Bank of Baroda.
Senior citizens typically get about 0.50 percentage points more, with some special schemes going higher.
Note the dates. In Upstox's 14 October roundup, HDFC Bank's rate card was effective from 19 August, PNB's from 1 June and Bank of Baroda's from 12 June: all before the hike. Only ICICI's sheet was dated after it (13 October). Some lenders did move: Bajaj Finance, an NBFC, raised FD rates by 0.15 to 0.40 percentage points from 7 October, to 7.75% for 31 to 60 months for general depositors. Remember that a deposit with an NBFC carries different risks from a bank deposit, which is part of why the rate is higher.
The cost of waiting, in rupees
Say you have ₹3,00,000 to deposit for two years at SBI's 6.45%.
Simple interest for one year: about ₹19,350. (Actual FD interest compounds quarterly, so you earn a little more.)
If you leave the money in a savings account at, say, 2.5% for two months while waiting, you earn about ₹1,250 instead of about ₹3,225 at the FD rate. That is roughly ₹2,000 given up.
For the wait to pay off, the rate you eventually lock in needs to be higher by enough to make up that ₹2,000 over the remaining term. On ₹3 lakh over two years, that is a rise of roughly a third of a percentage point.
So waiting only helps if rates rise meaningfully and soon. Given the SBI chairman's reported comments, that is far from certain.
A simple FD ladder so you do not have to guess
An FD ladder splits your money across different maturities. Some of it matures each year, so you regularly get the chance to reinvest at whatever rates are then.
With ₹3,00,000, one way to do it:
₹1,00,000 for 1 year
₹1,00,000 for 2 years
₹1,00,000 for 3 years
Each year, when one FD matures, reinvest it for 3 years. After two years you have a rolling set of deposits, one maturing every year. If rates have risen, a third of your money catches the higher rate within twelve months. If they fall, the longer deposits are already locked in.
Saurabh Jain of Stable Money suggested something similar to Goodreturns: investors with set horizons "could consider locking in rates gradually," given that another increase is anticipated by some at the December policy meeting.
Before you book
Keep your emergency fund out of long FDs. Breaking one early usually means a penalty and a lower rate.
FD interest is taxed at your income-tax slab rate. Your post-tax return is what matters, especially if you are in a higher bracket.
Compare the specific tenure, not the headline rate. Many banks' best rates sit on odd tenures like 444 days.
If you are a senior citizen, check the senior and special-scheme rates separately.
This is general information, not financial advice. Rates change often, so check the bank's own page on the day you book.
If you have been holding cash and waiting for the "right" FD rate, a ladder lets you start this week without betting on what the RBI does in December.
