Loans and EMIs

RBI raises repo rate to 5.5% on 7 October 2026: what it means for your EMI and FD

RBI raised the repo rate from 5.25% to 5.5% on 7 October 2026. How much loan EMIs can rise, when banks pass it on, and what happens to FD rates.

By Saifu team · 7 October 2026 · 6 min read · Reviewed by Chandan Kumar Dash

Try it: Loan EMI calculatorMonthly EMI, total interest and a year-by-year split of principal and interest for any home, car or personal loan.

RBI's Monetary Policy Committee raised the repo rate by 0.25 percentage points, from 5.25% to 5.5%, on 7 October 2026. It is the first rise since February 2023. Business Standard reported that the vote was unanimous. Here is what it means for your money.

What RBI decided

Repo rate: 5.5%, up from 5.25%, from 7 October 2026. This is the rate RBI charges banks.
Stance: "calibrated tightening", as reported by Business Standard. The Governor said a rate cut was unlikely in the near term, so the next move is either a hold or another rise.
Inflation: RBI now expects inflation of 5.2% for 2026-27, with 6.0% in October to December 2026, as reported by Business Standard.
Growth: RBI raised its growth estimate for 2026-27 to 7.1%, as reported by Business Standard.

When we checked on the morning of 7 October 2026, RBI had not yet posted the policy statement on its website. The figures above are as Business Standard reported them.

Your home loan or car loan

Most bank home loans taken after October 2019 have a floating rate linked to the repo rate. Banks must reset these loans at least once every three months, so your rate will usually rise by 0.25 percentage points at your loan's next reset date. Some banks pass it on within days. Loans linked to the older MCLR benchmark move more slowly. Fixed-rate loans do not change.

An example. On a ₹50 lakh home loan over 20 years, a rise in the loan rate from 8% to 8.25% takes the EMI from ₹41,822 to ₹42,603, about ₹781 more a month. Many banks keep the EMI the same and add months to the loan instead. That costs you more interest over the whole loan, so ask your bank which one it will do. You can choose a higher EMI instead of a longer loan. Try your own numbers in the EMI calculator.

If you have spare money, a part-prepayment now cuts both the interest and the effect of this rise. Check your loan's prepayment terms first. Banks cannot charge a prepayment fee on floating-rate loans to individuals.

Banks that have raised loan rates

PTI reported on 7 October 2026 that these banks have raised their repo-linked lending rate by 0.25 percentage points:

Punjab National Bank: 8.35%, up from 8.10%, from 8 October 2026. Its MCLR and base rate are unchanged.
Indian Bank: 8.20%, up from 7.95%, from 8 October 2026.
Bank of India: 8.35%, from 8 October 2026.
Indian Overseas Bank: 8.35%, from 8 October 2026.
Bank of Baroda: 8.15%, up from 7.90%, from 8 October 2026, as reported by Business Standard.
Tamilnad Mercantile Bank: 8.5%, up from 8.25%, from 8 October 2026, as reported by Business Standard.
UCO Bank: 8.30%, up from 8.05%, from 8 October 2026, as reported by Business Standard.
Karur Vysya Bank: 8.80%, up from 8.55%, from 8 October 2026, as reported by Business Standard on 9 October.

This is the bank's benchmark rate, not your loan rate. Your rate is the benchmark plus the margin in your loan agreement, so it goes up by the same 0.25 percentage points from your loan's next reset date. If your bank is not listed, check its website or your next loan statement.

SBI raised its loan rates from 15 October

SBI raised its repo-linked rates by 0.25 percentage points from 15 October 2026, according to its rates page. Its external benchmark lending rate (EBLR), which its home loans follow, is now 8.15% plus a credit risk premium and a business strategy premium, up from 7.90%. Its repo-linked lending rate (RLLR) is now 7.75% plus a credit risk premium, up from 7.50%. So SBI floating-rate loans linked to these rates cost 0.25 percentage points more. SBI's new home loan rates from 15 October are 7.50% to 8.80%, depending on the borrower's credit score and other conditions, as reported by Livemint.

SBI raised its MCLR by 0.15 percentage points for loans of 3 months to 3 years from 15 October 2026, according to its rates page. The one-year MCLR, which most older SBI home loans follow, is now 8.85%, up from 8.70%. The 3-month rate is 8.40%, the 6-month rate 8.75%, the 2-year rate 8.90% and the 3-year rate 8.95%. The overnight and one-month rates stay at 7.85%. This affects only SBI loans linked to MCLR, from their next reset date, which is usually once a year.

HDFC Bank cut its MCLR instead

HDFC Bank went the other way for older loans. It cut its MCLR by 0.05 to 0.15 percentage points from 7 October 2026, as reported by Business Standard on 8 October. Its one-year MCLR is now 8.30%, down from 8.35%, and the full range is 7.75% to 8.55%. This helps only loans linked to HDFC Bank's MCLR, at their next reset date. Its repo-linked loans are not covered by this cut.

Your fixed deposits

FD rates usually rise a little after a repo rise, but not at once and not by the full amount. A new FD booked after banks revise their rates gets the higher rate. An FD you already have keeps the rate it started with. See current bank rates on our FD rates page and the full repo history on the rates page.

Do not expect a quick rise. SBI chairman C S Setty said on 8 October 2026 that he does not expect banks to change deposit rates for the next two to three months, because banks have enough money to lend, as reported by Upstox.

Some finance companies have moved first, as reported by Business Today:

Bajaj Finance: up to 0.40 percentage points more from 7 October 2026. Its 31 to 60 month FD now pays 7.75%, up from 7.40%, and 8.15% for senior citizens, up from 7.75%.
Shriram Finance: new rates from 11 October 2026. Its 36 to 60 month FD pays 7.85%, up from 7.50%, and senior citizens get 0.50 percentage points more.

These are company FDs, not bank FDs. They are not covered by the deposit insurance of up to ₹5 lakh that bank FDs have, so their safety depends on the company.

What does not change

Credit card interest is not linked to the repo rate. It stays at your card's rate, usually 42% to 45% a year.
Small savings rates (PPF 7.1%, Sukanya Samriddhi 8.2%) are fixed by the government for October to December 2026 and do not move with this decision.

Your bank deposits in one statement

RBI also announced two changes to how you see your money, as reported by Business Today and Outlook Money. Both are due by 31 December 2026.

Bank deposits in your CAS. If you have a demat account, the consolidated account statement (CAS) from NSDL or CDSL will also show your bank deposit accounts, next to your shares and mutual funds. The depositories will get this information through account aggregators.
One account aggregator is enough. Account aggregators will work with each other. You will need to sign up with only one to see and share data from banks and other institutions linked to any of them.

What next

The next RBI rate decision is due on 4 December 2026.

Sources: SBI: EBLR and RLLR from 15 October 2026, SBI: MCLR rates from 15 October 2026, Livemint: SBI hikes home loan interest rates, The Economic Times: SBI revises EBLR, RLLR and MCLR, Business Standard: RBI MPC hikes repo rate by 25 bps to 5.5%, Business Standard: RBI policy live, GDP and inflation projections, RBI: Monetary Policy Committee meeting schedule 2026-27, Business Today: RBI to show bank and demat data in one place, Outlook Money: RBI account aggregator and CAS measures, RBI: Statement on Developmental and Regulatory Policies, 7 October 2026, Free Press Journal (PTI): banks begin raising lending rates, Siasat (PTI): banks raise lending rates after RBI rate hike, Business Standard: state-owned banks raise repo-linked lending rates, Upstox: what the SBI chairman said on FD rates, Business Today: Bajaj Finance raises FD rates, Business Today: Shriram Finance raises FD rates from 11 October, Business Standard: major banks hike loan rates after RBI move, Business Standard: HDFC Bank cuts MCLR rates by up to 15 bps.

Rates and rules change. Check your lender's terms. This is general information.

Rules, rates and limits change. Check the official source linked above before you rely on a figure here. Last checked 18 October 2026. Posts never contain referral or affiliate links from the writer.

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