Premium On Capital: Fixed Deposit Rates Rise, Loans Still Expensive 

The fixed deposit (FD) rates have risen by 15-80 basis points (bps) in 2018 - where one basis point is one-hundredth of a percentage point, whereas the interest rates on home, car, personal loans will continue to go up in 2019 as well, say bankers.

The year 2018 was not good for borrowers, with significant banks and non-banking finance companies (NBFC) steadily increasing interest rates on home loans, car loans and personal loans.

However, from the starting of this year, banks have increased FD rates. “Most banks that are well capitalised have been seeing strong credit growth. Hence, there is an increased focus on retail fixed deposits during the course of the year. There is a renewed focus on pushing for both CASA (current account savings account) and term deposits,” quoted Executive Director of Axis Bank Ltd Rajiv Anand, as reported by Live Mint.

The interest rate on home loans, car loans and personal loans, on the other hand, have got expensive. The Reserve Bank of India (RBI), for the first time in four years, has increased policy rates.