Term Deposit Rate
Source: CMIE Economic Outlook, 1 Finance Research
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What does the Term Deposit Rates data represent?
- The Term Deposit Rates data represents the interest rates offered by banks on fixed-term deposits.
- These rates are crucial indicators of the returns that individuals can expect on their savings in bank accounts.
What is the significance of the Term Deposits data?
- This data influences the saving behaviour of consumers and plays a significant role in the financial sector's stability and attractiveness.
- These rates are often adjusted in response to changes in monetary policy. They are closely linked to the central bank's policy rates and are used as tools to manage liquidity and control inflation.
- Changes in deposit rates reflect and influence overall demand conditions in the economy since the changes in these rates affect consumer spending patterns, particularly in terms of discretionary spending versus saving.
How to interpret the Term Deposits data?
- Higher rates might lead to increased savings and reduced consumption. Attractive deposit rates can enhance the soundness of financial institutions by increasing their deposit base, and liquidity which is crucial for their lending activities.
- Deposit rates are typically set with changes in repo rates which are aligned for inflation. Higher rates compensate for higher inflation, maintaining the real return on deposits.
- Changes in central bank policy rates are reflected in term deposit rates, indicating the effectiveness of monetary policy transmission.
Related HFIs
Aggregate Bank Deposits
Bank Credit to Industries
Bank Credit to Services
Bank Nifty - PE Ratio
Broad Money (M3)
Cash Reserve Ratio (CRR)
Foreign Exchange Reserves
Foreign Portfolio Investments (FPIs) - Debt
Marginal Cost of Funds based Lending Rates (MCLR)
Net Liquidity Injections/Absorptions
Repo Rate
SCBs Credit Deposit Ratio
Sectoral Bank Credit - Personal Loans
Statutory Liquidity Ratio (SLR)
