Chasing 9% FD? Your ₹5L Above ₹5L Is Uninsured

RBI hiked repo rate. Banks are revising FD rates — senior citizens can earn up to 9%+ at small finance banks. But anything above ₹5 lakh at any bank is uninsured under DICGC. Here's how to chase the best rate without losing your principal.

Here's what happened: RBI raised the repo rate to 5.50%, prompting banks to revise FD rates — small finance banks now offer up to 9%+ for senior citizens on 3–5 year deposits.. Public sector banks have moved slower, offering 6.5–7.5% for seniors, while private and small finance banks are already offering 8–9.1% for the same tenures.. The same rate hike that boosts FD returns will reset MCLR-linked floating home and personal loan EMIs upward within 1–3 billing cycles for most borrowers..

What you should do: Split your FD corpus into chunks of ₹5 lakh or less across different banks — each chunk gets separate DICGC insurance cover of ₹5 lakh, protecting your full principal.. Check your home or personal loan agreement for the MCLR reset date — if it falls in the next 90 days, calculate your new EMI now and adjust your monthly budget.. Compare senior citizen FD rates on bank websites this week before locking in — rates are being revised rapidly and the best windows at SFBs often close within 2–4 weeks of a repo hike..

Pro tip: Park ₹5L at an SFB for the 9% rate, and the remaining corpus in a PSU bank FD — you maximise yield AND stay fully insured on every rupee.