You need to park money for the short term for a variety of reasons. You could need the funds in an emergency and it needs to be as liquid as possible. Secondly, you may have a confirmed cash outflow and you cannot miss out on that. Thirdly, you may have just received a lump sum payment and you are looking to park it temporarily before taking a final call. When you park for the short term (around 1 year), you need a mechanism that is safe, liquid and also gives returns above the rate of inflation.

Source: www.motilaloswal.com