RBI proposes new FD interest rate rules: What it means for bulk deposits and savers

The RBI has released draft amendment directions that could give banks more flexibility in setting interest rates on large deposits, while also requiring greater transparency in how those rates are disclosed.

According to the central bank, the objective is to provide "greater flexibility to banks for pricing their rupee bulk deposits" and ensure "uniformity in the disclosure of interest rates on deposits."

The draft proposals are currently open for public feedback until June 20, 2026, after which the RBI will decide whether to implement the changes and in what form.

One of the key changes relates to transparency. The RBI has proposed that: "Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance on the bank's website, before the commencement of the Business Day."

In simple terms, banks would be required to clearly publish their applicable deposit rates upfront, making it easier for customers to compare offerings across institutions.

What are bulk deposits and why do they matter?

The proposal mainly focuses on bulk deposits, which are large-value deposits accepted by banks.

"A bank shall have the freedom to offer differential interest rate on bulk deposits" based on applicable run-off rates under the Liquidity Coverage Ratio (LCR) framework.

Will ordinary FD investors be affected?

Not immediately, and perhaps not as much as large depositors.

According to CFP Shweta Shastri, fixed deposits may no longer remain a simple "book-and-forget" product if the proposal is implemented in its current form.

"Earlier, rates were more or less similar across banks, but going forward, you might see noticeable differences based on deposit size, tenure, and even how urgently a bank needs funds at that point," she said.

She advises depositors to compare rates before renewing FDs and, in the case of larger deposits, explore whether banks are willing to offer better rates, particularly through branch relationships or relationship managers.

At the same time, she cautions against chasing slightly higher returns without considering liquidity needs. Factors such as premature withdrawal penalties, sweep-in FD features, payout options and emergency fund requirements remain equally important when choosing an FD.

While the biggest impact may be felt by large depositors, retail savers may also benefit from a more competitive deposit market over time.