Why Fixed Deposit Rates Varies – Real Reasons

There are many parameters which leads to the fluctuations in the interest rates of bank, as specially interest given on A Fixed Deposit.

LIQUIDITY

Its one of the primary parameters for variations in FD Interest rate. Liquidity is such a product which can be exchanged very quickly in market in exchange or purchase of any other product or asset. One of primary examples for liquidity is cash. Some times if there is a drastic changes in the demand-supply chain then also the interest rates can fluctuate an FD.

CREDIT OFFTAKE

Many industries such as Agriculture ( Agro industry), Manufacturing etc, generally takes credit from banks and in turn banks expect from them return of principle amount along with an accompanied  higher interest ( Interest rate higher than what is given in an FD). If there is a dip in the credit taken by the major industries or its relative…