If you think a 6% interest on a savings account is a big pact, imagine a return of 7-8%, even 8.5%. What banks are offering right now on short-term fixed deposits of up to 15-30 days (see table). These are no small, obscure banks trying to attract low-cost deposits. The country's largest commercial bank, the SBI, is also in the dispute.

Short-term Fixed Deposits offer higher interest rates
Banks	Interest Rates (%)	Premature withdrawal penality
Corporation Bank	8.50	1% less
UCO Bank	8.00	1% less
State Bank of Hyderabad	7.00	1% less
State Bank of India	7.00	0.5% less
State Bank of Bikaner & Jaipur	7.00	Nil
Source: ET

"Today, you can get an fixed deposit interest rate of 7% for 7 days of storage. So, I do not think that savings bank interest is a very important factor determining the customer," said SBI chairman Pratip Chaudhuri ET Now speaking earlier this month. What's more, you can stop the repository every time you want, so there is no compromise on the face liquidity. The penalty is only 1% lower interest rate. This still works out from 6 to 7.5%, much better than the 5.5% offered by some bank deposits up to RS1 lakh.

But for a customer to get high interest rates offered, it is imperative that these short-term deposits to be launched online. If these require a visit to the bank, filling out forms and KYC procedures, the whole purpose is defeated. Moreover, breaking the automatic deposit and should not require any document of the investor. So if your bank offers online banking and offer attractive rates on short-term deposits, start today.

This can be especially useful if you have a lot of money to be used in the short term. For example, if you sold a house recently and are waiting to invest this money, you can benefit from such arrangements. The barrier to entry is very low, with a minimum investment in the SBI should be as little as SR1, 000 in UCO Bank, the RS100.

For customers who wish to park large amounts of short-term liquidity means be a good option. The best cash has annualized returns of over 9% last month. You do not sacrifice liquidity, when you invest in these funds. The money is in your account within one day of redemption of the investment.

Furthermore, there is output load in the background. Again, much will depend on how the investor buys the liquid funds. If buying online, it's pretty simple, but if required a visit to the broker or investment funds in the office and fill out the forms, the usefulness of these short-term way down.