Bank of India Short Term FD

Understanding Bank of India Short Term FD

Bank of India Short Term FD is a fixed-deposit option that lets customers invest a lump sum for 7 days to 1 year, offering stable and fixed returns. The minimum amount for opening a BOI Short Term FD is ₹10,000 at metro and urban branches, and ₹5,000 at rural and semi-urban branches. Senior citizens can start with a minimum of ₹5,000. For very short tenures of 7 to 14 days, a minimum deposit of ₹1 lakh is required. Bank of India FD rates vary by tenure, with senior citizens earning an additional 0.50% interest, while super senior citizens receive an extra 0.65% on eligible retail deposits.

Bank of India Short Term FD Interest Rates

Bank of India short-term FD interest rates differ by tenure and customer category, and while they may change periodically, BOI consistently offers competitive short-term rates. Below are the latest FD interest rates across various maturity periods:

*BOI Short Term FD Interest Rates Effective from 4 August 2025.

Benefits of Bank of India Short Term FD

Here are the key benefits of the Bank of India Short Term Fixed Deposit scheme:

• No Maximum Deposit Limit: There is no upper limit on how much you can deposit under the Bank of India Short Term FD scheme, making it suitable for both small and large investors.
• Flexible Tenure Options: Depositors can choose any duration from 7 days to 12 months, allowing the FD to align with short-term financial needs or upcoming expenses.
• Interest Payment Cycle: Interest on BOI Short Term FDs is paid on a half-yearly basis, and if the scheduled payment day is a holiday, the payout is processed on the next working day.
• Premature Withdrawal Allowed: With Bank of India FD premature withdrawal, customers receive interest applicable for the exact number of days the deposit remained with the bank.
• Sweep-Out Facility: BOI offers easy fund management through the Sweep Out FD, allowing customers to automatically sweep funds between FD and accounts for better liquidity.

How to Open a Bank of India Short Term FD?

Bank of India allows customers to open short-term FDs through multiple channels online and offline, ensuring convenience for all types of users.

Online Process to Open BOI Short Term FD

Follow these simple steps to open a BOI Short Term FD online:

• Log In to Online Banking: Log in through BOI’s Internet Banking portal or the BOI Mobile App.
• Navigate to Deposits Section: Go to the Deposits or Term Deposits menu.
• Select New FD Option: Choose the option to Open a New Fixed Deposit.
• Enter Key Deposit Details: Enter the deposit amount and select your preferred short-term tenure.
• Choose Interest Payout Mode: Select your payout preference, cumulative or periodic.
• Review and Submit: Verify all details and submit the request to complete the FD opening process.

Offline Process to Open BOI Short Term FD

Customers who prefer in-person service can:

• Visit the Branch: Visit your nearest Bank of India branch.
• Fill the Application Form: Request for Short term FD in BOI and complete the Fixed Deposit opening form.
• Submit KYC Documents: Provide your KYC documents if the bank requires verification.
• Choose FD Tenure and Payout Mode: Specify the desired FD tenure and your preferred interest payout option.
• Make the Deposit: Submit the deposit amount through cheque, cash, or account transfer.
• Receive the FD Receipt: Collect the FD receipt issued by the bank.

Who Should Consider Bank of India Short Term FD?

Bank of India short-term FDs are well-suited for various types of investors:

• Customers with Surplus Short-Term Funds: If you have surplus funds in your savings account that you won’t need for the next 1 - 12 months, a short-term FD helps you earn better returns.
• Risk-Averse Investors: For investors who prefer guaranteed returns over market-linked volatility, BOI short-term FDs offer security and predictability.
• Senior Citizens: Senior citizens get higher interest rates, making these FDs suitable for safe, short-term investing of retirement funds.
• Salaried Professionals: Employees can use BOI short-term FDs to plan for short-term goals such as vacations, insurance premiums, or EMI cushions.
• Small Businesses: Businesses with fluctuating cash flows can invest surplus funds in short-term FDs to earn interest until funds are needed again.
• Students and First-Time Investors: Shorter tenures, low minimum deposit requirements, and safety make this an excellent entry-level investment option.

Tax Considerations on Bank of India Short Term FD

The interest from BOI short-term FDs is taxable under standard fixed deposit tax rules in India. TDS (Tax Deducted at Source) is deducted if interest income across all BOI branches exceeds ₹50,000 in a financial year, while senior citizens enjoy a higher threshold of ₹1,00,000. The TDS rate is 10% when PAN is provided, and 20% otherwise. Depositers whose total income falls below taxable limits can avoid TDS by submitting Form 15G (for non-senior citizens) or Form 15H (for senior citizens), ensuring that tax is not deducted at source.

Key Takeaways

Bank of India Short Term FDs offer a reliable method to keep funds for short periods, with tenures ranging from 7 days to 12 months and interest rates between 3% and 6.25% for general customers and 3% to 6.75% for senior citizens. They provide assured returns, premature withdrawal, and convenient online or branch opening. Always review the latest rates and select a tenure that fits your cash-flow needs.