"RBI Cuts Repo Rate: How It Affects Your EMIs and Fixed Deposits"

The Repo Rate is the interest rate at which banks borrow money from the Reserve Bank of India (RBI). When the RBI cuts the repo rate, it means banks can get loans at a cheaper rate. This change can have a direct impact on your loans, savings, and overall financial well-being.

How Does It Affect You?

?? Lower EMIs on Loans

• If you have a home loan, car loan, or personal loan, a lower repo rate means banks may reduce their interest rates.
• This means your EMIs (monthly payments) can go down, helping you save money every month.
• Example: If your home loan interest rate was 8% and it drops to 7.75%, your EMI will reduce, making it easier to manage expenses.

?? Lower Interest on Fixed Deposits (FDs)

• If banks reduce their loan interest rates, they also reduce FD interest rates.
• This means you will earn less interest on your savings in FDs.
• Example: If you were getting 6.5% interest on your FD, it might drop to 6.25%, reducing your earnings.

?? Easier Loans for Businesses

• Companies and small businesses can borrow money at lower interest rates.
• This helps businesses grow, create more jobs, and improve the economy.

What Should You Do?

? If you have a loan, check with your bank about reduced EMIs. ? If you rely on FD interest for income, consider exploring other investments like mutual funds, bonds, or government schemes. ? If you’re planning a big purchase (house, car, business loan), this could be a good time to get a loan at a lower rate.

A repo rate cut can be good for borrowers but not great for savers. Understanding how it works helps you make smarter financial decisions!