It's the right time for investors to lock their funds in fixed deposits as the interest rates may soften following the cuts in repo rate and CRR.

Bankers feel that the repo cut may begin soft interest rate regime in the economy. Banks may first reduce their cost of funds before reducing their lending rate. Thus it is expected that the deposit rates would decline in the coming times.

Presently interest rates of around 10.5% are offered on deposits with a maturity of one year to less than three years by most banks. Senior citizens are earning an additional 50 to 100 basis points on the card rates. These interest rates last prevailed in 1999-00 for the same tenure. The interest rates in the market declined after 2000, in fact the rates dipped to as low as 5.25 to 5.50% in 2003-04.

Both private sector and public sector banks are offering handsome interest rates at the present situation. HDFC Bank is offering interest rate of 10.90% for deposits of Rs 1 lakh and above with maturity of 30 months. Deposits below Rs 1 lakh are earning 10.55%. ING Vysya Bank is offering 11% for 365 days and 10% for 99 days. Country's largest private lender, ICICI Bank is also offering 10.5% for 390 days, 590 days and 890 days deposits. The Bank's deposit of 390 days earning 10.5% is attractive but it is also advisable to go in for 890 days deposit as it will escape the depositor from the approaching low interest rates.

Public sector, SBI is offering the highest rate of 10.5% on longest tenure (1000 days). Others likes Indian Overseas Bank are offering 10.5% for 720 days and Canara Bank customers can earn 10.5% for deposits in the maturity range of 500 days to two years.

All these rates on fixed deposit are in the highest range and they will certainly decline in the coming times. If an individual deposits his funds for a longer term, it would fix his amount for a higher interest rate even if the interest rates turn southwards.