Why Do FD Rates Fluctuate?

Fixed Deposit (FD) rates can fluctuate due to several factors: 
Monetary Policy: Changes in central bank policies, such as adjustments to the repo rate, directly influence the FD rates set by financial institutions. 
Inflation Rates: To counteract inflation, financial institutions may offer higher FD rates. Conversely, lower inflation can lead to reduced rates. 
Market Competition: Financial institutions may alter FD rates to remain competitive and attract deposits, responding to changes in market conditions and competitor rates. 
Liquidity Needs: Institutions adjust FD rates based on their need for liquidity. Higher rates may be offered to attract more deposits when funds are needed.