• The RBI’s policy rate cut in February this year is likely to nudge banks to trim deposit rates over the coming months.
  • Though a sharp cut is unlikely in the near term, depositors with surplus funds should consider locking into attractive rates now.
  • Banks had raised deposit rates last year with those in the private sector hiking rates more aggressively.
  • With the RBI expected to cut the policy rate further in the coming months, retail deposit rates offered by banks are likely to fall too.
  • Remember, bank deposits score on safety over options such as deposits in NBFCs (non-banking finance companies) or non-convertible debentures (NCDs).
  • Bank deposits are covered by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC). Each depositor is insured up to ₹1 lakh for principal and interest.