RBI keeps repo rate unchanged: What it means for your EMIs and fixed deposits

For home loan borrowers and depositors, the Reserve Bank of India’s decision to hold the repo rate at 5.5% means one thing: time to plan, not panic. “Today’s rate pause gives borrowers breathing room, and may be the last chance for depositors to lock in high FD rates,” said Adhil Shetty, CEO of BankBazaar.com. With no rate hike and inflation easing, the central bank has created a window of stability—but not certainty.

After cutting rates by 100 basis points between February and June, the RBI has now opted to wait and watch. With inflation at just 2.1% in June—well below the 4% target—the central bank is in no rush to tighten, especially as global conditions remain fragile. The decision comes just days before the U.S. imposes steep tariffs on Indian imports, adding fresh uncertainty to India’s external trade outlook.

For home loan borrowers, this pause offers continued relief. Lending rates have already softened, with major banks offering loans below 8% for prime borrowers—especially in balance transfer or refinance deals. A ₹60 lakh loan at 8.5% floating rate over 20 years still translates to a monthly EMI of around ₹52,000. With the repo rate unchanged, these EMIs are unlikely to rise in the short term.

Borrowers currently servicing older loans at higher rates should consider switching to repo-linked loans, which pass on RBI decisions more quickly. “If your interest rate is 50 basis points or more above market rates, it’s time to refinance,” Shetty advised.

For depositors, especially senior citizens, this may be the last leg of high returns. Many banks still offer over 7.25% on select tenures, with an extra 25–50 basis points for seniors. But if rate cuts resume later this year, new FD offers could start falling.

“Locking in fixed deposits now can help protect your returns before rates start to soften,” said Shetty.

The RBI’s cautious stance signals it’s watching how the global storm unfolds. For now, stability rules. But both borrowers and savers would do well to act while this window lasts.