What is the Minimum Period for Fixed Deposits?

Fixed Deposits or FDs are one of the most popular and preferred investment options in the country. The main reason for this is that fixed deposits offer guaranteed returns with minimal risk. Moreover, fixed deposits can also offer flexibility and liquidity if the investors choose to invest in short-term FDs. Let us take a look at the minimum fixed deposit period in this article and how short-term FDs can benefit you.

Minimum period for fixed deposits

The minimum fixed deposit period can vary among different banks and Non-Banking Financial Institutions (NBFCs). However, the FD minimum period offered by most banks and NBFCs is typically seven days.

These short-term fixed deposits are a straightforward way for investors to park their money safely for a short period of time while still earning interest on their invested amount. However, it is important to note that short-term fixed deposits generally offer lower rates of interest compared to long-term fixed deposits.

If you are looking to invest in a short-term or long-term fixed deposit, you can easily do so online with IndusInd Bank. The entire process is 100% digital and paperless and some other highlights of IndusInd Bank Fixed Deposits include:

●      Competitive interest rates for higher returns

●      Online video KYC option for those who wish to invest a huge sum in FD

●      Tax-saver FDs to help you save on taxes

●      Easily manage and access your fixed deposit account using IndusInd Bank’s mobile app

Benefits of short-term deposits

Short-term fixed deposits are defined as FDs with a tenure of seven days to one year. Some of the key benefits of short-term fixed deposits include:

Liquidity: Since short-term FDs have a short tenure that you can decide depending upon your requirements, they are a good liquid investment. For instance, if you need to save up funds to buy a new car six months from now, you can open a fixed deposit account with a tenure of six months to earn high interest and then use the funds after maturity to buy the new vehicle.

Lower risk, guaranteed returns: Given the short tenure and predetermined interest rates, short-term FDs are an incredibly safe investment option offering a fixed return. If you want to know exactly how much return you will generate in the short term, you can use an online fixed deposit calculator.

Reinvest for better returns: Investors have the option to keep reinvesting their investment along with the interest earnings in short-term FDs to keep earning increasingly higher returns, while still maintaining liquidity on their savings.

To conclude

Short-term FDs are a fantastic way to earn some returns while maintaining liquidity. However, you must be careful while choosing your FD tenure. If you want to save up for an event in the distant future, medium or long-term FDs can help you earn significantly higher returns than short-term FDs. On the other hand, if you end up choosing a long-term FD and end up needing the funds before maturity, you will need to break your FD, losing out on some of the interest returns in the process. Thus, you should make an informed decision about your FD tenure after considering all viable options and understanding when you will require that amount.