In 2025, banks and small finance banks lowered fixed deposit (FD) interest rates multiple times, influenced by the Reserve Bank of India's 125 basis point repo rate cuts. This led to reduced returns for new FD investors. Experts anticipate FD rates in 2026 will likely remain stable or trend slightly lower, rather than increasing significantly, assuming inflation stays controlled and monetary policy remains accommodative. A sharp rise is considered unlikely unless inflation resurges or economic stress emerges.