New Delhi, Oct. 7 -- The Reserve Bank of India's (RBI) 25-basis-point repo rate hike to 5.50% is likely to particularly impact those investing in fixed deposits (FDs). However, the impact will not be immediate for those who already hold FDs.

This is because a repo rate hike does not automatically change the interest rate on an FD investment that has already been booked. The rates continue to remain fixed for the agreed tenure. The impact is more relevant for new deposits and FDs that mature and are renewed after the bank revises its deposit rates.

Adhil Shetty, CEO, BankBazaar, said, "The RBI's 25 basis point increase, to a repo rate of 5.50%, is a welcome step for savers, though the benefit will build up gradually. Banks usually revise...