You might be aware that the interest rates in bank changes from one quarter to another quarter. So in case, the interest rate falls in the next quarter, still the bank will have to pay a higher rate of interest for your fixed deposit as a result it will incur a loss. If its the other way round bank earns a profit. So, basically its a hedging mechanism.
I am planning to put some money as Fixed deposit on State bank India. While checking interest rates its 9.25% for one year and less than 9% period more than one year.
Why theres a difference. i thought a longer period should yield higher interest rate
