RBI MPC 2026: RBI keeps rates steady, how fixed deposit investors may get affected the most

Fixed deposit investors have received a breather as the Reserve Bank of India (RBI) chose to leave the policy repo rate unchanged at 5.25% at its first Monetary Policy Committee (MPC) meeting of the year. The decision follows a 25 basis point reduction in December 2025, completing a cumulative 125 basis point easing since February last year.

The status quo offers temporary rate stability for depositors. With expectations of another round of easing still alive later in the year, the current environment may suit investors looking to secure fixed deposit yields before banks adjust rates lower in response to earlier policy cuts.

What the pause means for FD investors

According to a note by Team Cred, the MPC’s decision to hold rates steady reflects a consolidation phase, allowing the cumulative easing already delivered to transmit fully through the system. The RBI has retained a neutral stance, even as growth dynamics remain supportive.

On growth, the central bank’s outlook remains quietly confident. GDP growth for FY26 is estimated at a strong 7.4%, driven largely by domestic demand engines such as private consumption, fixed investment, and resilient services activity. High capacity utilisation, healthy corporate balance sheets, robust credit growth, and continued public capital expenditure provide a solid base for expansion.

However, the external environment remains mixed. Net exports continue to weigh on growth, even as recent trade agreements with partners such as the European Union, the United States, New Zealand, and Oman offer medium-term diversification benefits. The RBI has also flagged geopolitical tensions and commodity price volatility as potential downside risks.

Inflation, meanwhile, has turned decisively more comfortable. Food prices are in outright deflation, while core inflation—excluding food and fuel—has remained stable, reinforcing the case for a pause.

What this means in practice

For savers, sharply lower inflation projections combined with the absence of fresh rate cuts suggest that deposit rates and high-quality bond yields are unlikely to compress meaningfully in the immediate term. This creates a reasonable opportunity to lock in fixed-income yields where suitable.

For borrowers, the lack of a rate cut delays incremental EMI relief. However, the cumulative easing already delivered continues to support affordability, and refinancing or spread-compression opportunities remain relevant, particularly for borrowers with strong credit profiles.

For investors and markets, the stance remains neutral but growth-supportive. Domestic demand themes—such as consumption recovery, GST-led efficiency gains, and sustained public capex—continue to dominate. At the same time, export-oriented and globally exposed sectors warrant closer monitoring amid ongoing trade volatility.

Rates now and then

“The RBI’s decision to keep the repo rate unchanged offers much-needed stability for investors amid global uncertainty,” said Saurabh Jain, co-founder and CEO of Stable Money. “Historically, repo rate cuts are followed by reductions in FD rates, so this pause creates a timely window for investors to lock in attractive fixed deposit returns.”

Jain pointed out that select higher-yield options remain available, with rates of up to 7.75% offered by Slice and 7.5% by Utkarsh Bank, making fixed deposits a compelling choice for investors seeking predictable returns.

At the same time, the scope for further upside in FD rates appears limited, particularly among larger lenders. Adhil Shetty, CEO of BankBazaar, said that while liquidity conditions continue to support deposit mobilisation, materially higher FD rates are unlikely in a steady-rate environment.

How FD investors can plan during a pause

Financial advisers suggest that FD investors focus on structure rather than chasing peak rates. Common strategies include breaking deposits into multiple tranches across tenures, staggering maturities to maintain liquidity, and reviewing the mix between bank FDs, corporate FDs, and government-backed options based on risk appetite and time horizon.

“Investors assessing locking strategies may benefit from spreading allocations across multi-year tenures to preserve returns before further repricing takes place,” Shetty said.

Senior citizen FDs remain particularly attractive due to additional rate premiums offered by banks. However, Shetty cautioned that these premiums may also adjust gradually as lenders adapt to a stable but lower reference-rate environment.

“Senior citizen benefits remain an advantage, though these too are expected to evolve as banks settle into the current rate cycle,” he said.