RBI revises deposit interest rate rules: What fixed deposit investors should know before investing from October 1
The Reserve Bank of India (RBI) has overhauled the rules governing how banks offer and disclose deposit interest rates, with the revised framework set to take effect from October 1. Although the changes are unlikely to alter returns on retail fixed deposits overnight, they are expected to make FD pricing more transparent for customers while giving banks greater flexibility in setting rates for bulk deposits.
The directions will apply to commercial banks, small finance banks, regional rural banks (RRBs), local area banks, payment banks and urban cooperative banks.
What changes for retail FD investors?
For retail depositors, the biggest change is greater transparency and uniformity in how deposit rates are offered.
Under the revised directions, banks will have to offer the same interest rate across all branches for deposits of a similar amount accepted on the same day. In other words, customers opening identical deposits at different branches of the same bank cannot be offered different rates.
The RBI has said that interest rates offered on deposits, including bulk deposits, “shall be uniform across all branches and for all customers” and that there should be no discrimination between similar deposits accepted on the same date.
The central bank has also tightened disclosure norms. Banks will have to publish their schedule of deposit interest rates on their websites in advance, and interest paid on deposits must strictly follow the published schedule.
For bulk deposits, banks must upload the applicable interest rates on their websites by 10:00 am on every business day, with a grace period until 10:10 am.
The changes are expected to make it easier for customers to compare deposit rates before investing and reduce the possibility of branch-level variations for similar deposits.
What changes for bulk deposits?
The more significant policy change is for banks rather than retail depositors.
The RBI has allowed banks to offer differential interest rates on bulk deposits by taking into account the different run-off rates applicable under the Liquidity Coverage Ratio (LCR) framework. The same flexibility has also been extended to rupee deposits of non-residents.
According to the RBI, the objective is to give banks greater flexibility in pricing rupee bulk deposits while ensuring greater transparency and uniformity in the disclosure of deposit interest rates.
The RBI’s revised framework does not mandate any increase or reduction in fixed deposit interest rates. Banks will continue to determine their deposit rates based on factors such as liquidity requirements, funding costs and market conditions.
The new rules primarily change how banks disclose deposit rates and how they can price bulk deposits, rather than prescribing the level of interest rates for retail FDs.
The revised framework follows a draft proposal issued by the RBI in June 2026 that invited comments from banks and other stakeholders. After considering the feedback, the central bank issued the final directions and subsequently postponed their implementation to October 1 to allow banks more time to comply.
