FD schemes: RBI draft rules aim to boost transparency in investments; what it means for you

The Reserve Bank of India (RBI) has proposed draft amendments that could make fixed deposit (FD) rates more transparent while giving banks greater flexibility in pricing large deposits. While the changes are primarily aimed at bulk deposits, ordinary savers and FD investors may also benefit from a more competitive deposit market over time.

The draft directions, released by the RBI for public consultation, seek to provide “greater flexibility to banks for pricing their rupee bulk deposits” and ensure “uniformity in the disclosure of interest rates on deposits.” Stakeholders can submit feedback until June 20, 2026.

What is changing?

A major focus of the proposal is transparency.

The RBI has proposed that banks must clearly publish their deposit interest rates on their websites before the start of each business day. According to the draft:

“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.”

For depositors, this means banks will have to disclose applicable rates upfront, making it easier to compare FD schemes and other deposit products across institutions.

The move is expected to reduce ambiguity around interest rates and improve transparency for customers looking to lock money into fixed deposits.

Why are bulk deposits important?

The proposed changes mainly relate to bulk deposits, which are large-value deposits accepted by banks from individuals, companies, institutions, and high-net-worth customers.

Under the draft framework, banks will be allowed to offer different interest rates on bulk deposits depending on their liquidity requirements and funding needs.

The RBI has proposed that:

“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.

This means banks needing additional funds may choose to offer higher rates to attract large deposits, while those with comfortable liquidity may offer lower rates.

What does it mean for FD investors?

The immediate impact on regular retail FD investors may be limited because the proposal does not directly alter retail fixed deposit rules.

However, experts believe the changes could gradually influence the broader deposit market.

According to Certified Financial Planner (CFP) Shweta Shastri, fixed deposits may become a product that requires more active monitoring.

“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, where applicable, negotiate better rates for larger deposits through relationship managers or branch-level discussions.

At the same time, investors should not focus solely on the highest interest rate. Factors such as premature withdrawal penalties, sweep-in FD facilities, liquidity needs, and payout options remain equally important when choosing an FD scheme.

Current FD rates

The RBI’s proposal comes at a time when FD rates remain relatively attractive across the banking sector.

As of June 3, 2026, scheduled banks offer FD rates ranging from 2.50% to 8.10% per annum, depending on tenure and institution.

Small finance banks continue to offer the highest returns. Suryoday Small Finance Bank and Utkarsh Small Finance Bank currently offer rates of up to 8.10%, while Jana Small Finance Bank offers up to 7.77%.

Among private sector lenders, banks such as IDFC FIRST Bank, Bandhan Bank, DCB Bank, Yes Bank, CSB Bank, RBL Bank, and Tamilnad Mercantile Bank offer rates above 7% on select tenures.

Large public sector banks, including SBI, Bank of Baroda, Punjab National Bank, and Canara Bank, generally offer rates between 6.45% and 6.75%, while major private banks such as HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank offer rates largely in the 6.45%-6.80% range.

While the draft proposal is focused on bulk deposits, greater transparency and flexibility could ultimately benefit retail savers as well. As banks gain more freedom in managing deposit pricing, competition for deposits may increase, potentially leading to more differentiated FD offerings and better opportunities for investors who compare rates carefully before investing.