As is customary at the beginning of each month, October will bring several significant changes to bank term deposits in the country. The Reserve Bank of India plans to amend the FD rules, after which new provisions on term deposits, including updates regarding FD interest rates, will come into effect.
The new rules for term deposits, which will take effect from October 1, 2026, primarily affect large deposits or bulk deposits (Bulk FD Deposit), meaning deposits of 30 million rupees or more. According to the amendments approved by the RBI, banks will be entitled to set differentiated interest rates for large deposits, taking into account differential outflow rates applicable to deposits or unsecured bulk deposits within the LCR structure.
Furthermore, while changing the rules for term deposit interest rates, the RBI aims to provide banks with greater flexibility in determining rates. Starting from October 1st, banks are now required to publish the interest rates offered on their websites, including for bulk deposits. Interest rates for bulk deposits must be updated daily at 10:00 AM on the bank's website, with an additional buffer of 10 minutes, and the announcement must be made no later than 10:10 AM.
The Central Bank has also instructed banks to provide the same interest rate for a term deposit amount opened on the same day, regardless of the branch. The bank emphasized that there should be no discrimination regarding the interest accrued on identical deposit amounts opened on the same day at any branch.
The main question is how these changes, effective from October 1, 2026, will affect ordinary depositors. Since the new rules pertain to large sums (30 million rupees and above), the impact of these changes on term deposit holders is expected to be limited. Nevertheless, these directives will increase transparency and uniformity in banking operations.
It is worth noting that term deposit schemes have become very popular recently when it comes to safe investments and high returns. This is especially true for senior citizens, as banks offer them higher interest rates compared to regular customers, reaching 8-9 percent. Additionally, various banks offer extra benefits and increased interest rates on special FD schemes for different tenures.
