Types of fixed deposits
Short-Term Fixed Deposits (7 days – 1 year)
Park surplus money for 7 days to under a year — rates, how interest is calculated on short tenures, and alternatives like liquid funds and sweep-in accounts.
Updated 30 September 2026 · 25 banks trackedHighest FD rate now
7.45%
Bandhan Bank · 2 – <3 yearsWhat you need to know
Short-term FDs run from 7 days up to one year. Rates rise with tenure — around 3% for 7–14 days, 4.5%–5.5% for 3–6 months and 5.5%–6.5% for 6–12 months at most large banks. For deposits below six months banks generally pay simple interest at maturity; from six months onward interest is compounded quarterly.
Short-tenure rates at leading banks
| Bank | Rates below 1 year (general) |
|---|---|
| State Bank of India | 7 – 45 days: 3.05% · 46 – 179 days: 4.90% · 180 – 210 days: 5.65% · 211 days – <1 year: 5.90% |
| HDFC Bank | 7 – 14 days: 2.75% · 15 – 29 days: 2.75% · 30 days – 2 months: 3.25% · 2 – 3 months: 4.25% · 3 – 6 months: 4.25% · 6 – 9 months: 5.50% · 9 – 12 months: 5.75% |
| ICICI Bank | 7 – 45 days: 2.75% · 46 – 90 days: 4.00% · 91 – 184 days: 4.50% · 185 days – <1 year: 5.50% |
| Axis Bank | 7 – 14 days: 3.00% · 15 – 29 days: 3.00% · 30 – 45 days: 3.25% · 46 – 60 days: 4.00% · 61 – 87 days: 4.75% · 88 days – 3 months 24 days: 5.00% · 3 months 25 days – <4 months: 5.00% · 4 – <6 months: 5.00% |
| Bank of Baroda | 7 – 14 days: 3.50% · 15 – 45 days: 3.50% · 46 – 90 days: 5.00% · 91 – 180 days: 5.00% · 181 – 210 days: 5.50% · 211 – 270 days: 5.75% · 271 days – <1 year: 6.00% |
| Punjab National Bank | 7 – 14 days: 3.00% · 15 – 45 days: 3.00% · 46 – 90 days: 4.50% · 91 – 154 days: 4.90% · 155 days: 5.55% · 156 – 179 days: 4.90% · 180 – 270 days: 5.60% · 271 – 302 days: 5.60% |
| Kotak Mahindra Bank | 7 – 14 days: 2.75% · 15 – 30 days: 2.75% · 31 – 45 days: 3.00% · 46 – 90 days: 3.50% · 91 days: 4.00% · 92 – 179 days: 4.25% · 180 days: 5.00% · 181 – 269 days: 5.50% |
| IDFC FIRST Bank | 7 – 29 days: 3.25% · 30 – 45 days: 3.50% · 46 – 90 days: 4.50% · 91 – 180 days: 5.00% · 181 days – <1 year: 6.50% |
| YES Bank | 7 – 14 days: 3.25% · 15 – 30 days: 3.50% · 31 – 45 days: 3.50% · 46 – 60 days: 4.50% · 61 – 90 days: 4.50% · 91 – 120 days: 4.75% · 121 – 150 days: 4.75% · 151 – 180 days: 4.75% |
When a short-term FD makes sense
- Money needed for a known expense within a year — fees, tax payment, a down payment.
- Parking an emergency fund in a sweep-in FD so it earns more than a savings account.
- Waiting to reinvest a maturity amount when rates are expected to rise.
Short-term FD vs alternatives
| Option | Typical return | Liquidity | Tax |
|---|---|---|---|
| Savings account | 2.5% – 3% (higher at some private banks) | Instant | Slab rate |
| Sweep-in FD | FD rate for days held | Instant (auto-break) | Slab rate |
| Short-term FD | 3% – 6.5% | Penalty on early exit | Slab rate |
| Liquid mutual fund | ≈ repo-linked, not guaranteed | T+1 | Slab rate (no indexation) |
Frequently asked questions
What is the minimum FD tenure?
7 days at almost all banks.
Is interest compounded on a 3-month FD?
Usually not — deposits below 6 months earn simple interest paid at maturity.
Information is for education and comparison. Rates and rules change — confirm with your bank and a tax adviser before investing. FinancePortal is not a financial or tax adviser.