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  • Short Term Fixed Deposit

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  • 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    • Money can be withdrawn from an FD account before maturity but only after paying a fine.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

    • Corporation Bank Fixed Deposit
      "Comfortable Fixed deposit"
      0.5 4.0/5 "Great!"
      I have opt for five years of fixed deposit with Corporation Bank. I can invest minimum of Rs. 1000 and max amount, they are providing the current interest of 7.5% per annum but I can also prolong the duration. I have online option to deposit the fd amount, even the maturity comes along the interest to the direct account.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jul 15, 2019
    • Post Office
      Post Office Fixed Deposit
      "Service needs to be improved"
      0.5 3.0/5 "Satisfactory"
      I do not use Post office service often because its inconvenient and they recently started the debit card service or else we need to visit to the branch for the withdrawing the money in the queue. But Post office fixed deposit interest has more interest, my mother is taking care of it.
      Was this review helpful? 1
      , gurgaon
      Reviewed on Jul 13, 2019
    • YES Bank Fixed Deposit
      "Good investment for future"
      0.5 5.0/5 "Blown Away!"
      I opened fixed deposit account in YES, as per the government rules they are providing 8% of interest on yearly basis. I am investing Rs. 50,000 per months it has the tenure period of five months, the online accessibility is good with my Yes bank.
      Was this review helpful? 0
      , kolkata
      Reviewed on Jul 11, 2019
    • HDFC Bank Fixed Deposit
      "Its satisfactory"
      0.5 4.0/5 "Great!"
      HDFC fixed deposit interest rate is very competitive as like other banks. I have activated the tenure period of one year. The online banking is convenient to manage my all investment, I can access all the information through netbanking without visiting to the bank.
      Was this review helpful? 2
      , bangalore
      Reviewed on Jun 30, 2019
    • SBI Fixed Deposit
      "PR"
      0.5 5.0/5 "Blown Away!"
      All customer can deposit the SBI fixed deposit from min of Rs. 10,000 , I believe they give 7% of interest for per annum. I have option to activate or de activate the service through online without going to the bank , there is no documentation to be signed for the online procedure. There is no charges for pre matured of FD.
      Was this review helpful? 6
      , mumbai
      Reviewed on Jun 29, 2019
    • ICICI Bank Fixed Deposit
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been taken my fixed deposit ICICI bank from long time, Their service is good, i have deposit certain amount which will get mature after five years once it will get mature again i will deposit , their interest rate is less comparing to other bank.
      Was this review helpful? 3
      , chennai
      Reviewed on Jun 29, 2019
    • Punjab National Bank Fixed Deposit
      "Secured Fixed deposit"
      0.5 4.5/5 "Excellent!"
      I invested Rs. 50,000 in PNB fixed deposit it has the duration of one year then again the fixed deposit renew automatically, I am getting sms alert during the transactions. But I felt the rate of interest is lower as compared to HDFC , it would be great if they increase the interest for saving and fixed deposit.
      Was this review helpful? 3
      , bangalore
      Reviewed on Jun 29, 2019
    • HDFC Bank Fixed Deposit
      "Userfriendly Experience"
      0.5 4.0/5 "Great!"
      HDFC Bank FD is providing 7% of interest per annum, I can invest maximum of Rs.1.5 lakhs for under tax coverage. The tenure period get extend automatically after the maturity, for the tax saving FD there is five years of limit . I can deposit and withdraw the liquidity through online.
      Was this review helpful? 1
      , bangalore
      Reviewed on Jun 29, 2019
    • review Fixed Deposit
      "Awesome"
      0.5 5.0/5 "Blown Away!"
      Recently I done a Fixed Deposit on FINCARE SMALL FINANCE BANK which was referred by colleague. The policies and services are good. They are providing interest rate of 9.5% for senior citizen and the locking period is 24months. The customer service is superb.
      Was this review helpful? 5
      , ahmedabad
      Reviewed on Jun 26, 2019
    • SBI Fixed Deposit
      "Interest rates are good compared to others"
      0.5 3.0/5 "Satisfactory"
      No reason for choosing my fixed deposit account with state bank of India. They are providing a interest rate of 6.75%. I have invested the amount of Rs. 50000. There is a lockin period of 2 years. I can deposit for a long time as well. There is processing fee for my FD account.
      Was this review helpful? 6
      , kolkata
      Reviewed on Jun 24, 2019
    • Standard Chartered Bank Fixed Deposit
      "Recommendable Product"
      0.5 5.0/5 "Blown Away!"
      For the fixed deposit, Standard Chartered is providing flexible duration based on that interest may get vary. I would say its very attractive than other banks. Minimum we can invest from Rs. 10,000, the online transaction is very convenient as well.
      Was this review helpful? 1
      , noida
      Reviewed on Jun 24, 2019
    • Standard Chartered Bank Fixed Deposit
      "Recommendable Product"
      0.5 5.0/5 "Blown Away!"
      For the fixed deposit, Standard Chartered is providing flexible duration based on that interest may get vary. I would say its very attractive than other banks. Minimum we can invest from Rs. 10,000, the online transaction is very convenient as well.
      Was this review helpful? 1
      , noida
      Reviewed on Jun 24, 2019
    • Kotak Fixed Deposit
      "Good Experience"
      0.5 5.0/5 "Blown Away!"
      I activated fixed deposit through Kotak Mahindra online banking, minimum we can invest from Rs. 10,000 for the duration of one year. The interest rate is good than other bank, there is no charges for per mature liquidity. The closure procedure is very easily I can also deactivate the FD service through online.
      Was this review helpful? 3
      , chandigarh
      Reviewed on Jun 21, 2019
    • Karur Vysya Bank Fixed Deposit
      "Service is good"
      0.5 5.0/5 "Blown Away!"
      Rate of interest is little bit high compared to other bank hence i have chosen the Karur Vysya bank for my fixed deposit. I have invested the amount of Rs. 5 lakhs. They have given me a monthly interest rate of Rs. 4400. I have got a proper response from the bank. On the maturity date, i have submit the bond and get the cash.
      Was this review helpful? 2
      , chennai
      Reviewed on Jun 16, 2019
    • Indian Bank Fixed Deposit
      "Service is good"
      0.5 5.0/5 "Blown Away!"
      I have chosen the Indian bank because of its a Government undertaken bank. I have invested the amount of Rs. 5 lakhs. They have given me a interest rate of 4100 monthly basis. They won't charge for anything extra. I visited their branch and put the money and the employee response. I'm happy about the returns because i got the interest on monthly basis.
      Was this review helpful? 2
      , chennai
      Reviewed on Jun 16, 2019
    • SBI Fixed Deposit
      "Safe and secured"
      0.5 5.0/5 "Blown Away!"
      Being a middle class person definitely I think to invest my money that's the reason I chosen SBI fixed deposit because its safe and secured. I can deposit for long term, the online feature is great and I can open and close the FD account through netbanking.
      Was this review helpful? 11
      , kolkata
      Reviewed on Jun 13, 2019
    • ICICI Bank Fixed Deposit
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I did a Fixed deposit in ICICI BANK for my kids because I got my salary account and also have opened separate account for my kids and wife on the same bank so its easy to do the payment and linked together. The interest rate is 6.75% moreover the options are very flexible, the locking period is like 1month , 3 months, one year,etc and even the online services are enabled. Whenever I have good amount on the account so go for FD on the selected month, the interest amount will be credited into account.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Jun 11, 2019
    • Oriental Bank of Commerce Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have Oriental bank Of Commerce Fixed deposit account ,I have not faced any difficulties so far on using this account .Customer service is also good so far .Each and every transaction will be safe and secure .There was no drawbacks faced so far .I am very much comfortable and easy going and completely satisfied with the service.
      Was this review helpful? 3
      , hyderabad
      Reviewed on Jun 06, 2019
    • Axis Bank Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have a Fixed deposit account with Axis Bank. I have not faced any difficulties so far on using this account. The customer service is also good so far. Each and every transaction will be safe and secure .There was no drawbacks faced so far. I am very much comfortable in using this account.
      Was this review helpful? 4
      , hyderabad
      Reviewed on Jun 06, 2019
    • HDFC Bank Fixed Deposit
      "Good"
      0.5 4.0/5 "Great!"
      I done a Fixed Deposit account with HDFC BANK before 2 years and the rate of interest was good. I have withdrawn the money and its neither loss or nor profit. My money is safer and return is very low. There was no locking period and the executive is supportive.
      Was this review helpful? 4
      , mumbai
      Reviewed on May 30, 2019
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