Short-term FDs are popular savings tools offering attractive returns. Their maturity periods range from a few days to a year. Interest rates and tenors vary by issuer. These FDs provide flexibility, allowing quick access to funds during emergencies with the premature withdrawal option. Consider short-term FDs for parking surplus money or saving for near-future goals. Investments in short-term FDs could serve as an alternative during times of market volatility.

Short-term Fixed Deposit Interest Rates

The following table highlights the short-term FD interest rates offered by some issuers. These rates are for tenors between 7 days and 12 months. It is important to note that the interest earned is taxable at the income tax bracket applicable to you.

Issuer

Regular Citizen (p.a.)

Senior Citizen (p.a.)

Bank of Baroda

4.25% - 7.10%

4.75% - 7.60%

HDFC Bank

3.00% - 6.60% 

3.50% - 6.50%

Kotak Mahindra Bank

2.75% - 6.50%

3.25% - 7.00%

State Bank of India

3.50% - 6.50%

4.00% - 7.00%

Bank of India

3.00% - 6.80%

3.00% - 7.30%

Canara Bank

4.00% - 6.85%

4.00% - 7.35%

ICICI Bank

3.00% - 6.70%

4.75% - 7.30%

Axis Bank

3.00% - 6.00% 

3.50% - 6.50%

AU Small Finance Bank

3.75% - 7.25%

4.25% - 7.75%

YES Bank

3.25% - 7.25%

3.75% - 7.75%

Ujjivan Small Finance Bank

3.75% - 6.50%

4.25% - 7.00%

Disclaimer: The interest rates mentioned are subject to change without prior notice. The rates listed are for informational purposes only. They may not reflect the current offerings. Reach out to the respective issuers directly for the most up-to-date interest rates.

Advantages of Short-term Fixed Deposits

Here are some of the key-advantages of a short-term FD:

  • Achieve Short-term Goals

A short-term FD could be an ideal option if you have any upcoming expenses. This can include down payments for a purchase, vacation expense, education fees, etc.

  • Capital Preservation

Short-term FDs are low-risk investments. They provide the investor with a stable and secure way to preserve their capital. 

  • Interest Payout Options

You may choose to receive interest periodically at an interval of your choice. This can be monthly, quarterly, half-yearly, or at maturity. You may even choose a payout at the end of your maturity. 

  • Security 

Temporarily deposit funds before investing in high-yield investments. The Deposit Insurance and Credit Guarantee Corporation (DICGC) covers up to ₹5 Lakhs per depositor per bank.

  • Overdraft Facility

Opt for a loan against your FD and receive up to a certain percentage of your deposit amount. You can avail this loan with a minimal amount of paperwork.

Tax Implications on Short-term FDs

The interest earned from short-term FDs are taxable as per the Income Tax Act, 1961. Here, the interest amount is added to your total income. It will be taxed as per the income tax bracket you fall in. FD issuers deduct a 10% TDS (Tax Deducted at Source) if the interest earned in a financial year exceeds the limit. This has been set at ₹40,000 and ₹50,000 for non-senior citizens and senior citizens, respectively. 

 

If your income is below the prescribed tax limit, you could submit Form 15G or 15H to avoid TDS deductions.

ITR File Kiya Kya?

File online, track refund updates, calculate deductions, and more.
Tax image

Disclaimer

The information provided by BFDL is related to the rates provided by Banks and Deposit taking NBFCs as available from public domain and under no circumstances is intended to be source of advice or recommendation of any financial investment advice or endorsement of any sort. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers and use of such information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. Display of any intellectual property along with the related product information does not imply BFDL’s partnership with the owner of the intellectual property of such products and is solely for the purpose of information, unless otherwise provided by BFDL.

Frequently Asked Questions

Are short-term FDs taxable?

Yes. The interest that you earn from a short-term deposit is taxable at the income tax slab rate applicable to you.

What is the minimum tenor for a short-term FD?

The minimum tenor for a short-term FD starts from 7 days.

Can NRIs open a Short-Term FD?

Generally, short-term fixed deposits are only offered to Indian residents. However, a few banks and NBFCs also allow Non-resident Indians (NRIs) to book these FDs.

Are short-term FDs a good investment option?

Yes. You can earn guaranteed returns as per the short-term FD rates, and your investment amount remains secure.

Home
active_tab
Loan Offer
active_tab
Download App
active_tab
CIBIL Score
active_tab