• Short Term Fixed Deposit

    A fixed deposit is an investment option provided by banks or non-banking financial companies to deposit money and earn a certain rate of interest. The advantage of depositing money in a fixed deposit account is that it will give you a higher rate of return than a normal savings account. The maturity term for an FD account ranges from 7 days to 10 years. A short term fixed deposit has a maturity term from 7 days to a maximum of 12 months. Fixed deposit interest rates vary from bank to bank and this will fluctuate and may be also revised.

    Given below are the interest rates offered on short-term deposits by top banks:

    Bank Regular FD Rate (per annum) Senior Citizen FD Rate (per annum)
    SBI 5.75% to 6.40% 6.25% to 6.90%
    Axis Bank 3.50% to 6.50% 5.50% to 6.90%
    ICICI 4.00% to 6.50% 4.50% to 7.00%
    Citibank 3.00% to 5.00% 3.50% to 5.50%

    *The tenure taken is less than 365 days and the deposit value is less than Rs.1 crore

    Features of short term fixed deposit  

    • The maturity term of a short term fixed deposit ranges from 7 days to less than 12 months.
    • You can deposit money in such a term deposit only once.
    • You can opt to renew the short term fixed deposit account when it matures.
    • The tax on the funds in the account are deducted as per the Income Tax Act, 1961.
    • The rate of return on a time deposit account is usually high.
    • Money can be withdrawn from an FD account before maturity but only after paying a fine. However, there are some banks which offer no penalty on withdrawing money before maturity.
    • The minimum amount that you can invest in a short term deposit account varies from bank to bank. It is generally around Rs.10000. For minors, the starting amount is brought down by the banks.

    Advantages of short term deposits

    • It is the ideal option if you want to have transitory savings.
    • It provides greater liquidity with high rate of return.
    • A major advantage of such a fixed deposit is that it allows you to take a loan amount equivalent to 95% of the funds in your account without requiring a guarantor or any paperwork.
    • There is a provision for nomination when you open a term deposit account.
    • If you withdraw money before your term on the account ends, you will be charged an interest rate that is 1% less than the applicable rate.
    • The government considers funds in the short term fixed deposit account as security.
    • The fund in short term deposits can also be used as margin money for non-fund based services.

    Requirements for opening a short term fixed deposit account

    To open this type fixed deposit account, the requirements vary bank to bank. Most banks ask you to open a savings account along with the short term fixed deposit account. This removes the hassle of collecting the interest amount in person and it can be directly transferred to your savings account. Also the account holder should be a resident Indian although some banks offer Non-Resident Indians (NRIs) the option to open a short term fixed deposit account as well. To open fixed deposit account you would need an identity proof, passport size photos and proof of address.

    Some Options for Short-Term Investments 

    Investing and saving money is something everyone wants and needs. Even though, most of the time, saving money and investments are on a long-term basis. Mutual funds, fixed deposits are beneficial on a long-term basis and helps in accumulation of a large amount of money with the help of good interest rates.

    However, it is also highly beneficial to invest money on a short-term basis. While long-term investments can range from 1 year to 3 years or 5 years or 10 years, short-term investments range between 1 week to up to a year.

    Recurring deposits:

    One of the most common modes of short-term or long-term investments are recurring deposits.

    The duration of recurring deposit ranges from a minimum of 3 months and can go up to 10 years as well. There are no premature withdrawals allowed. The only way you can withdraw the money is during maturity or due to premature closing.

    The rate of interest for a recurring deposit is currently ranging between 4.5% per annum to 7.9% per annum.

    Short Term Bank Fixed Deposit:

    A short-term bank fixed deposit is another method of investing money for a shorter period of time. The tenure for this type of fixed deposit can range between 7 days and up to 1 year.

    The interest rate ranges between 3.5% per annum to 6.75% per annum which is taxable. There is no maximum limit for the fixed deposit, however the minimum amount is Rs.100.

    Post Office Time Deposit:

    Under this type of short-term investment, the tenure ranges between 1 to 5 years. This type of deposit is under the tax exemption scheme under Section 80C.

    The rate of interest is high and ranges between 6.9% per annum to 7.8% per annum. The minimum amount required to open the account is Rs.200.

    Sweep-in Fixed Deposit:

    This is an alternative for a savings account where any kind of excess amount which is more than the stipulated limit can be shifted to a sweep-in fixed deposit account. This account is known by different names depending on the bank.

    The rate of interest is the same as fixed deposits of the bank which is around 6.5% per annum and the tenure is mostly 12 months. The interest earned annually will be taxed if it is above Rs.10,000.

    There are other methods or options for short-term investments such as debt funds or debt mutual funds. The tenure is less than 12 months and the rate of interest is around 7% per annum.

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    Short Term FD Reviews

    • Oriental Bank of Commerce Fixed Deposit
      "Good Scheme"
      0.5 5.0/5 "Blown Away!"
      Since last 15 years, i have a account with Oriental bank of commerce thats the reason i have invested the money in fixed deposit with the same bank. I have invested the amount of Rs. 11 lakhs. They are giving the interest rate of 6.5%. There is no locking period but i have chosen the duration of 1.5 years. There is no additional charges deducted for this fixed deposit.
      Was this review helpful? 1
      , bulandshahr
      Reviewed on Dec 03, 2019
    • Post Office
      Post Office Fixed Deposit
      "Good Service"
      0.5 4.0/5 "Great!"
      Interest rate is very low in Indian post office Fixed deposit scheme because they are providing only 8.5%. I have chosen this office because of the child benefits. I have invested the money of Rs. 1.5 years. Its 3 years lock in period. Overall, I'm satisfied with the service provided by post office employees.
      Was this review helpful? 5
      , parvathipuram
      Reviewed on Dec 03, 2019
    • SBI Fixed Deposit
      "Good bank for Fixed Deposit"
      0.5 4.0/5 "Great!"
      I have invested the money in SBI for a fixed deposit and based on my wife recommendation i have chosen it. They are providing the interest rate of 7.25%. They have option to select the lock in period in that i have chosen 5 years. We had visited their branch and the response was good.
      Was this review helpful? 10
      , mumbai
      Reviewed on Nov 12, 2019
    • HDFC Bank Fixed Deposit
      "Good one"
      0.5 4.0/5 "Great!"
      Its easy accessible and to redeem so that i have invested the money in Fixed Deposit with HDFC BANK. I have invested the money of Rs. 2.5 lakhs and they have provided me a interest rate of 7.5%. There is no locking period. I didn't got any additional charges till now.
      Was this review helpful? 4
      , hyderabad
      Reviewed on Nov 12, 2019
    • Post Office Fixed Deposit
      "Safety deposit"
      0.5 5.0/5 "Blown Away!"
      I have paid the money of Rs. 4.5 lakhs as a fixed deposit in the Indian post office. For the safety purpose, i have chosen the post office account. They are offering me a interest rate of 7.9%. There is a lockin period of 5 years. If i withdraw the money in 1 year, they will reduce the interest rate of 2% and after 3 years, its 1%.
      Was this review helpful? 28
      , jaipur
      Reviewed on Nov 08, 2019
    • Central Bank of India Fixed Deposit
      "Good Bank"
      0.5 4.0/5 "Great!"
      Interest rates are less in Central Bank of India so I had taken a fixed deposit. I have invested the money of Rs. 1 lakh in my wife's name. Branch is near from my place so I have chosen this bank. Yearly once, I get the money of Rs. 6,765 for the interest. There is a locking period of 1 year.
      Was this review helpful? 1
      , tirupur
      Reviewed on Nov 06, 2019
    • ICICI Bank Fixed Deposit
      "Customer centrice & User friendly app"
      0.5 4.0/5 "Great!"
      I am doing Fixed Deposit with ICICI BANK and its been around 5years. They haven't been paying good interest and its more or less same like other banks as I used to hold my salary account with ICICI, I have decided to be with one bank. There is no locking period and its flexible. They do give good support and the app is user friendly. Even deposit account can be opened through i-mobile or net banking itself.
      Was this review helpful? 6
      , nasik
      Reviewed on Oct 15, 2019
    • SBI Fixed Deposit
      "Good"
      0.5 3.0/5 "Satisfactory"
      I had a Fixed Deposit in State Bank of India, I have completed the tenure before 3months ago. I have no issues with the customer service. They are given me 7% interest rate for 2years. There is no profit and processing fee. I got an online access, where I can check the interest rate anytime on the YONO app or else SBI online.
      Was this review helpful? 9
      , tirupati
      Reviewed on Oct 15, 2019
    • SBI Fixed Deposit
      "Interest charges are good. "
      0.5 3.0/5 "Satisfactory"
      I have invested some money through FD. My salary account is in SBI so i have a zero ATM charges and the limit is not actually set by SBI. They do have short term FDs which is pretty good. I have invested the money of Rs. 60000 and the interest rate is 10.01% for the tenure period of 16 months. There is no lockin period. There is no hassle to getting the money back.
      Was this review helpful? 16
      , kolkata
      Reviewed on Oct 01, 2019
    • Dena Bank Fixed Deposit
      "Good plan for senior citizen"
      0.5 2.0/5 "Expected more"
      I have invested the money in Dena bank through Fixed deposit and the growth is not that much good. They are not taking any hidden charges. Only because of the Government undertaken bank, i have selected them. They are providing a interest rate of 6% per annum. I have invested the money of Rs. 2 lakhs. There is a lockin period of 1 year.
      Was this review helpful? 5
      , new delhi
      Reviewed on Sep 24, 2019
    • Axis Bank Fixed Deposit
      "Interest should be increased for FD"
      0.5 3.0/5 "Satisfactory"
      I have opt for fixed deposit for the tax saving purpose because I have chosen five years tenure with AXIS Bank, still its going on. Only once I Invested my money it has the locking period of five years. I have option to check my transactions through mobile app. But I have concern about the interest rate is very lesser for this FD.
      Was this review helpful? 8
      , hyderabad
      Reviewed on Sep 19, 2019
    • SBI Fixed Deposit
      "FD process should be simpler"
      0.5 1.0/5 "Really Bad"
      I had fixed deposit with SBI then I withdrawn the amount, I done Rs. 3 lakhs of investment on my daughter name then I taken the liquidity to purchase the land, at the time I struggled a lot to take that money because the process was difficult to withdrawn the money after seven months of tenure.
      Was this review helpful? 23
      , madurai
      Reviewed on Sep 03, 2019
    • Union Bank of India Fixed Deposit
      "Not good"
      0.5 3.0/5 "Satisfactory"
      I had a Fixed Deposit with Union Bank of India and its closed 18 to 19 months due to personal reasons. I am doing investment but my experience is not good with FD account. In my home town, there is no other banks so just decided to go with this bank. The returns are good.
      Was this review helpful? 9
      , bangalore
      Reviewed on Aug 28, 2019
    • HDFC Bank Fixed Deposit
      "Good to go with HDFC"
      0.5 5.0/5 "Blown Away!"
      I have one FD with HDFC, I deposited Rs. 1 lakh, I was opt for 45 days of tenure. Finally I got 6.25% of interest for 45 days. It won't cover the tax, if we need tax benefits we should go for five years term. I can track the details through netbanking, on the maturity date the amount credits automatically in the account. Even the notification can customized.
      Was this review helpful? 18
      , bangalore
      Reviewed on Aug 27, 2019
    • HSBC Bank Fixed Deposit
      "wrong calculation of interest rates"
      0.5 0.5/5 "Unacceptable"
      HSBC staff wrongly pre closed my fixed deposit .. and calculated the interest rates wrongly and when asked them for clarification never got back .. even after following up with them repeatedly for more than 3 months.. would highly recommend not using their services.
      Was this review helpful? 5
      , visakhapatnam
      Reviewed on Aug 24, 2019
    • SBI Fixed Deposit
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I do have a Fixed deposit account with SBI and it was carried out by Mom and even I have account for my daughter. Its still running and they have Google application separately to access online. The returns are good. I am doing monthly investment and it was opened quite a long may be 4 years.
      Was this review helpful? 17
      , ahmedabad
      Reviewed on Aug 23, 2019
    • ICICI Bank Fixed Deposit
      "Good"
      0.5 5.0/5 "Blown Away!"
      I just opened a Fixed Deposit with ICICI BANK and have not done any survey on this. I am account holder with them so it was easy to do FD account even they are providing 7% interest rate. The process is very user friendly and never faced any hassle. I could access this account via online.
      Was this review helpful? 10
      , new delhi
      Reviewed on Aug 21, 2019
    • Post Office Fixed Deposit
      "Good for future"
      0.5 3.0/5 "Satisfactory"
      In post office rate of interest is higher for the fixed deposit when compared to the bank, I invested Rs. 5000 on monthly basis its comes in a year Rs. 60,000 after 5 years I got Rs. 3.75,000 I got Rs. 75,000 extra. The service is not comfortable if we have any relative who working there it would supportive or else difficult.
      Was this review helpful? 45
      , burdwan
      Reviewed on Aug 09, 2019
    • SBI Fixed Deposit
      "Good for future saving"
      0.5 5.0/5 "Blown Away!"
      I have FD with SBI, I have opt for one year term there is no such limitation for depositing the money. The interest rate is good for the FD, the online banking is convenient to take liquidity. They resolve the queries on time. Its most safe and secured.
      Was this review helpful? 11
      , visakhapatnam
      Reviewed on Aug 08, 2019
    • SBI Fixed Deposit
      "Average"
      0.5 4.0/5 "Great!"
      I have selected state bnak of indis fixed deposit amount 1 lakhs , Tenure 5 years and Rate of interest 8 percentage after renewal fixed deposit 6 percentage is very less .while document directly bank . Customer service is not good and responsive.
      Was this review helpful? 13
      , kochi
      Reviewed on Aug 05, 2019
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