Bank of India Short-Term FD

Bank of India Short Term FD Rates for Retail Deposits (<₹3 Crore)

The highest interest for BOI short-term FD is on the 1- year tenure, which is up to 6.25% p.a. for general citizens and 7.00% p.a. for senior citizens, effective from May 18, 2026 (last verified in September): 

*BOI Short Term FD Interest Rates effective from May 18, 2026 as per the IRDAI Regulations 2024

Bank of India Fixed Deposit: Key Features & Rules

Here are some of the features and rules of Bank of India short-term deposits

1. Minimum Deposit Amount:

   You generally need at least ₹10,000 to open an account in city branches or ₹5,000 in rural areas. However, if you choose a very short term of 7 days to 14 days, the minimum deposit requirement is ₹1 Lakh.

2. Interest Payout:

   Your BOI FD interest is calculated based on the full months and exact days your money stays in the bank. The bank pays this interest twice a year, on April 1st and October 1st.

3. Early Withdrawal:

   You can withdraw your money before the maturity date if needed. However, the bank may charge a small penalty fee as a BOI FD premature withdrawal penalty (usually 0.50% to 1.00%) depending on how much money you withdraw and how long you held the deposit. You can use the Bank of India deposit calculator to see your estimated returns. 

4. Sweep-Out Facility:

   BOI offers easy fund management through the Sweep Out FD, allowing customers to automatically sweep funds between FDs 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 a 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 a 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: BOI senior citizens FD rates are higher, which makes 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.

Taxation on Bank of India Short-Term FD

Interest earned on Bank of India short-term FDs is fully taxable based on your applicable income tax slab rate. Under standard banking rules, the bank deducts TDS at 10% if your total interest across all BOI branches exceeds ₹50,000 (general citizens) in a financial year and ₹1,00,000 (senior citizens). If your total annual income falls below the taxable limit, you can avoid TDS by submitting Form 121 (for both general and senior citizens). 

Please note that short-term FDs do not qualify for tax deductions under Section 123, as tax-saving benefits are reserved only for 5-year fixed deposits. 

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 3.00% and 7.00% p.a. for general customers and 3.00% to 7.50% p.a. for senior citizens. They provide secured returns, premature withdrawal, and convenient online or branch opening. Always review the latest rates and select a tenure that fits your cash-flow needs. Investing in short-term FDs is an excellent strategy for parking emergency funds or surplus cash, providing high liquidity with better returns than a standard savings account.