Indian Overseas Bank Short Term FD Rates

What is the Indian Overseas Bank Short Term FD?

An Indian Overseas Bank Short Term FD is a secure deposit option designed for investing funds over short tenures ranging from 7 days to less than 1 year while earning fixed and assured returns at prevailing Indian Overseas Bank FD interest rates. Senior citizens receive an additional 0.50%, and super senior citizens aged 80 years and above earn an extra 0.75% over the applicable regular FD rates, making it suitable for conservative short-term investments.

Indian Overseas Bank Short Term FD Interest Rates

Below are the prevailing interest rates applicable to Retail Domestic Term Deposits below ₹3 crore:

*Indian Overseas Bank Short Term FD interest rates w.e.f 15 December 2025

Features of the Indian Overseas Bank Short Term FD

Indian Overseas Bank short term FD is safe, flexible, and very easy to access. Key features include:

• Flexible Tenure: Select FD tenures of a minimum of 7 days to less than 1 year in short-term investments.
• Loan Against FD: Indian Overseas Bank provides an Indian Overseas Bank loan against FD. Depositors can borrow funds without closing their temporary FD which is normally 90% of the value in the FD.
• Broad Acceptability: Open FDs in any branch of the Indian Overseas Bank in India.
• Guaranteed Returns: A fixed interest during the tenure period, and interest must be paid either quarterly or upon maturity.
• Nomination Facility: Nominees may be added when opening the FD.

How to Open an Indian Overseas Bank Short Term FD?

Opening Short Term FD in the Indian Overseas Bank is simple and can be done either online or offline.

Online Process

Through Net Banking, you can easily open an FD through the online process. Follow these steps:

• Log in to IOB Net Banking: Access the official Indian Overseas Bank Internet Banking portal.
• Select FD Option: Select the short-term FD option in the deposits section.
• Check Interest Rates: Current rates for general and senior citizens.
• Enter Deposit: Enter the deposit amount, tenure and payout preference.
• Confirm Booking: Confirm and complete FD booking.
• Manage FD Online: Renew, cancel, or manage the FD using Net Banking.

Offline Process

The Indian Overseas Bank also allows customers to open an FD by approaching any branch of the bank. The steps are outlined below:

• Visit the Branch: Carry a valid identity and address proof.
• Collect FD Form: Request the Fixed Deposit application form.
• Fill FD Details: Fill in details of the deposit, tenure and nominee.
• Submit KYC Documents: Provide the required KYC documents for verification, if not already updated.
• Deposit Funds: Pay through cash, cheque or account transfer as per branch guidelines.
• Collect Receipt: Receive the FD receipt as proof of deposit.

Eligibility Criteria for Indian Overseas Bank Short Term FD

Indian Overseas Bank Short Term FD is accessible to a wide range of depositors, subject to basic eligibility norms:

• Eligible Customers: Customers can open an FD. Nomination is available for depositors.
• Deposit Requirement: Minimum deposit of ₹1,000. There is no upper limit for retail deposits.
• KYC Compliance: Customers will have to go through KYC according to RBI and IOB requirements. Current account holders with renewed KYC are allowed to open FDs online.
• Bulk Deposit Classification: Deposits of ₹3 crore and above are classified as bulk deposits and may carry different interest rates.

Taxation on Indian Overseas Bank Short Term FD

The short term FDs in the Indian Overseas Bank are taxable under the Income Tax Act on the interest earned. The deduction of Tax Deducted at Source (TDS) is made when interest on overall FDs in a financial year exceeds ₹50,000 for general and ₹1,00,000 in case of senior citizens. Form 15G or Form 15H can be filed by the eligible depositors to avoid TDS when their total income is lower than the taxable limit. This interest is included in total income and taxed at the rate of taxation.

Key Takeaways

Indian Overseas Bank Short Term FD offers a secure and flexible alternative to get fixed returns on a short-term basis. These deposits are easily accessed online or in branches, and liquidity is easily accessed in case of premature withdrawal or loans against FD. General citizens have 3.50% to 6.50% FD interest rates, senior citizens have 4.00% to 7.00% FD interest rates, and this is a good choice among conservative investors seeking to earn steady returns in the short term.