mumbai public sector bank allahabad bank has increased the interest rates for fixed deposits for various maturities by 25 to 150 basis points however it has cut the interest rates for deposits for more than one year but less than two year timeframe by 10 basis points to 915 the change in interest rates is effective november 16 karnataka bank too has opted to reduce the interest rates on the fixed deposits by 25 basis points effective november 10 this brings down the rate of interest on the one year bank fixed deposit to 9 idbi bank has also cut interest rates by 25 to 50 basis points on fixed deposit on november 1 market participants expect banks to further cut rates as interest rates go down over next 12 to 18 months banks are expected to cut interest rates further lock in your money in long term fixed deposits of three to five years if liquidity permits says amar pandit chief executive officer my financial advisor though short term bank fixed deposits may offer higher rates on long term bank fixed deposits it is better to lock in money as you may have to renew your short term fixed deposits at much lower rates one year down the line if you require money in near term better to stick with short term fixed deposits as breaking a long term fixed deposit attracts premature withdrawal penalty