HDFC Bank Short Term FD

Understanding HDFC Bank Short Term FD

A short term FD in HDFC Bank is a fixed deposit scheme, which allows the depositors to invest a lump sum for a tenure of between 7 days and 1 year with guaranteed and stable returns that are not subjected to market fluctuations. HDFC Bank FD rates are fixed during the opening of the FD, which allows effective financial planning and predictable returns. This FD has a low minimum deposit requirement, allowing young earners and first-time investors to invest in the FD.

HDFC Bank Short Term FD Interest Rates

Interest rates on HDFC Bank Short Term FD differ by tenure and customer category, with senior citizens earning higher returns. These FD interest rates generally increase for longer short term tenures, encouraging customers to choose extended durations to maximise earnings.

Below HDFC Bank for short term domestic deposit rates (on amounts less than ₹3 crore):

*HDFC Short Term FD Interest Rates Effective from 25 June 2025.

Benefits of HDFC Bank Short Term FD

Here are the key advantages of choosing a Short term FD with HDFC Bank:

• Easy Liquidity: It allows the premature withdrawal, which is liable to penalties (usually 1%) and a re-calculation of the interest. HDFC Bank FD Premature withdrawal allows the customers to have access to funds in the case of an emergency without closing their fixed deposit.
• Nomination Facility: This enables the depositors to appoint nominees to facilitate a hassle-free transfer of the maturity amount to the beneficiaries.
• No Maximum Deposit Limit: There is no maximum deposit limit; thus, the scheme is suitable for depositors and institutions wishing to invest the capital on a short term basis.
• Sweep-Out Facility: HDFC Bank offers a Sweep-Out facility where excess funds in your savings account are automatically transferred to a linked Fixed Deposit.

How to Open an HDFC Bank Short Term FD?

HDFC Bank provides its customers with the ability to open Short term FD either online or in a branch, which provides flexibility and accessibility.

1. Online Process to Open HDFC Bank Short Term FD

   To open a short term FD online with HDFC Bank, follow the following steps:

   • Log In: Log in to HDFC Bank Internet Banking or Mobile Banking application.
   • Navigate: Click on the Term Deposit / Fixed Deposit section.
   • Select FD: Select the option to open a New Fixed Deposit.
   • Enter Details: Enter the deposit amount, tenure, and mode of preferred interest payout.
   • Nominee Info: Include nominee details if required.
   • Verify & Authorise: Verify and authorise the transaction to complete the FD creation.

2. Offline Process to Open HDFC Bank Short Term FD

   To open a short term FD offline, visit a nearby HDFC Bank branch and complete the following steps:

   • Visit Branch: Visit your nearest HDFC Bank branch.
   • Fill Form: Fill in the Fixed Deposit opening form.
   • Submit KYC: Provide updated KYC documents, if needed.
   • Select Term & Interest: Choose tenure and interest payout mode.
   • Make a Deposit: Pay via cheque, cash, or bank transfer.
   • Receive Receipt: Receive a physical receipt acknowledging the FD.

Who Should Consider HDFC Bank Short Term FD?

HDFC Bank Short Term FDs are suitable for:

• Risk-Averse Investors: This product has safe returns but is not exposed to the market, thus it is attractive to those investors who are risk-averse.
• Senior Citizens: The increase in interest rates offers good income prospects to retirees.
• Salaried Professionals: Salaried employees who do regular savings can invest periodically and receive returns over time.
• Small Businesses: Small businesses with fluctuating cash flows can earn interest instead of holding cash.
• First-Time Investors: Short term FDs are a safe way to start when one is new to financial products.

Tax Considerations on HDFC Bank Short Term FD

Interest earned on HDFC Bank Short Term Fixed Deposit is completely taxable under the Income Tax Act. As per Section 194A, the bank will deduct Tax Deducted at Source (TDS) on applicable interest amounts before crediting interest to the depositor’s account. Furthermore, TDS applies when yearly FD interest goes beyond ₹50,000 for general taxpayers and ₹1,00,000 for senior citizens. The tax deducted should be reported while submitting the yearly income tax return, and investors are entitled to claim credit for TDS according to their personal income slab.

Key Takeaways

HDFC Bank Short Term FD is a safe investment option in case you want the security and assured returns within a tenure of between 7 days to 1 year. It offers competitive interest rates between 2.75% and 6.25% to the general public and 3.25% and 6.75% to the senior citizens. This FD is liquid, flexible, and offers guaranteed returns and is suitable for salaried depositors, first-time investors, retirees, and businesses with surplus funds. The HDFC Bank Short Term FD also has many benefits, such as different payment methods, no maximum limit to the amount deposited, early withdrawals, and easy online or offline opening of accounts.