Loan Against FD - Fixed Deposit

Banks offer the facility to avail of a loan against Fixed Deposit (FD) even if you are not eligible to get standard loans. You need not fulfil the criteria of the income limit, credit score, or underlying collateral. Yet you can avail of cheaper loans for short-term with various other benefits.

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Let us learn about its features with a detailed list of top banks offering loans against FD.

What is Loan Against a Fixed Deposit?

Loan against Fixed Deposit (FD) is the facility with which you can readily avail of loans while keeping your FD as collateral. This feature helps you to meet your urgent financial requirements without the need to break your Fixed Deposit prematurely.

You can use this loan amount to fulfil your expenses for an overseas vacation, settle urgent loan commitments, or medical treatment.

Comparison Between
Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund
Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund
Guaranteed Return Plans
Returns Before Tax
7.5% (TAX-FREE)
Returns After Tax
7.5%
Guaranteed Returns
Yes
Life Cover
Yes
Tax on Profit
Tax Free*
Risk
No Risk
awards
Still Better than FD’s and Debt Mutual Fund
Fixed Deposits
Returns Before Tax
7% (TAXABLE)
Returns After Tax
4.8%
Guaranteed Returns
Yes
Life Cover
No
Tax on Profit
Taxable
Risk
Low Risk
Debt Mutual Fund
Returns Before Tax
8% (TAXABLE)
Returns After Tax
5.5%
Guaranteed Returns
No
Life Cover
No
Tax on Profit
Taxable
Risk
High Risk
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*For annual premium upto ₹5 Lacs

List of Banks Offering Loans Against FD in 2023

Let us get a quick overview of some of the best banks offering the facility of loan against FD in the table below:

Name of Bank Interest Rate Charged (In % p.a. higher than normal FD rates) Limit for % of Loan Against FD Amount Limit of Loan Amount
Punjab National Bank (PNB) 0.75% p.a. higher 90% Rs. 25,000- Rs. 5 crores
State Bank of India (SBI) 1% p.a. higher 95% Rs. 5,000- Rs. 5 crores
Axis Bank 2% p.a. higher 85% Rs. 25,000 and above
HDFC Bank 2% p.a. higher 90% Rs. 25,000 and above
Bank of Baroda 1% p.a. higher 90% No upper limit
Citi Bank -- 90% Rs. 1 lakh and above
Yes Bank 1% p.a. higher 90% Rs. 10,000- Rs. 2 crores
Bandhan Bank 1.5%-2% p.a. higher 90%-95% --
Union Bank 2-3% p.a. higher 75% --
ICICI Bank -- 90% Up to Rs. 10 crores

Details of Top 5 Banks Providing Loan on Fixed Deposit

The list of top 5 banks that provide loans on FD with attractive features is mentioned below: 

  1. ICICI Bank- Loan Against FD

    Features:

    • Provides loan on FD as an overdraft facility

    • Loans against a maximum of 7 FDs are allowed

    • Interest Rate: Low

    • Charges & Fees: Zero Processing fee and no foreclosure charges

    • Loan Repayment Period: Contact the ICICI Bank

  2. PNB Bank- Loan Against FD

    Features:

    • Loan Amount Limit:

      • Rs. 5 crores for Sugam Deposit Scheme

      • Rs. 1 crore for other FD Schemes

    • Interest Rate: 0.75% above the FD interest rates

    • Loan against Capital Gains FD and Tax Saver FDs are not allowed

    • One loan is provided for only 1 FD

    • Loan Repayment Period: Least of up to 3 years or residual years of FD period

    fd return beater
  3. SBI Bank- Loan Against FD

    Features:

    • Loan on SBI bank FD Type: Demand Loan and Overdraft

    • Interest Rate: 1% above FD interest rates

    • Charges: No loan processing fees

    • Penalties: No penalty on pre-payment of loan

    • Interest is charged on the periodically reducing loan balance

    • Loan Repayment Period:

      • 5 years for Special Term Deposit Receipt (STDR)

      • 3 years for Term Deposit Receipt (TDR)

  4. Axis Bank- Loan Against FD

    Features:

    • Loan against Axis bank FD Type: Loan on demand & Overdraft facility

    • Interest Rate: 2% above FD interest rates

    • Charges: Zero processing fees

    • Penalties: No penalty on early closure of loan account

  5. Bank of Baroda - Loan Against FD

    Features:

    • Loan Type: Demand Loan/ Overdraft/ Term Loan

    • Charges: Zero processing fees

    • Loan on FD Limit: No upper limit

    • Penalties: No penalty on loan pre-payment

    • Loan Repayment Period: Up to maturity of FD Receipt (FDR)

FD interest rates India have fallen consistently over the last 12 years.
Invest in Plans that offer Guaranteed Returns for over 25 Years

Eligibility Criteria

Customers who hold a Fixed Deposit (FD) Account in the bank and fall into the following categories are eligible to avail of a loan against Fixed Deposit:

  • Resident Indians: Joint and Single Life Account

  • Hindu Undivided Family (HUF)

  • Family Trusts

  • Societies, Clubs, Associations

  • Sole Proprietorships

  • Companies

  • Partnership Firms

Banks do not give loans against FD to the following persons:

  • Persons under lien/ restraint/ encumbrance

  • On the FD account of a minor person

  • Loan on Tax Saving FDs

Guaranteed return plan Guaranteed return plan

Benefits of Loan against Fixed Deposit

Now let us understand the top benefits of a loan against Fixed Deposit as follows:

  1. Cheaper Interest Rates

    The loan on FD is offered at cheaper interest rates than the rates of personal loans.

  2. Hassle-free Loan Processing

    The loan or overdraft on Fixed Deposit account is fast and hassle-free.

  3. No Processing Charges

    Banks and NBFCs impose no charges on the processing of loans on FD.

  4. Least Paperwork

    As the customer already holds an account with the bank with required documentation, hefty paperwork is not required to get a loan on FD with an overdraft.

  5. No Need for a Credit Score

    To get a loan on FD, the general loan parameters like credit score, or income limit are not taken into consideration. The bank secures the FD amount as the pledge.

  6. No Penalty on Pre-Payment

    Banks and lending institutions do not penalise for repayment of the loan amount in advance.

  7. Avoid Premature Withdrawal

    The customers need not prematurely break their FD account and lose their investment returns.

Wrapping It Up

Banks and lending institutions provide a loan against fixed deposits with a range of benefits. Experts advise keeping your loan and overdraft on FD in check with your financial planning. Contact your bank to get more details on this facility and make a learned decision. Also it is suggested to have a look on highest bank FD rates before taking investment decision in FD.

Allahabad Bank FD Interest Rates

Allahabad Bank FD Interest Rates

Andhra Bank FD Interest Rates

Andhra Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

Axis Bank FD Rates

Axis Bank FD Rates

Bajaj Finance FD Interest Rates

Bajaj Finance FD Interest Rates

Bandhan Bank FD Interest Rates

Bandhan Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of India FD Interest Rates

Bank of India FD Interest Rates

Bank of Maharashtra FD Interest Rates

Bank of Maharashtra FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Canara Bank FD Interest Rates

Canara Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Central Bank of India FD Interest Rates

Central Bank of India FD Interest Rates

Citibank FD Interest Rates

Citibank FD Interest Rates

City Union Bank FD Interest Rates

City Union Bank FD Interest Rates

Corporation Bank FD Interest Rates

Corporation Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

DBS Bank FD Interest Rates

DBS Bank FD Interest Rates

Dena Bank FD Interest Rates

Dena Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

HDFC Bank FD Interest Rates

HDFC Bank FD Interest Rates

HSBC FD Interest Rates

HSBC FD Interest Rates

ICICI Bank FD Interest Rates

ICICI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDFC First Bank FD Interest Rates

IDFC First Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

IndusInd Bank FD Interest Rates

IndusInd Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Muthoot Capital

Muthoot Capital

Nainital Bank FD Interest Rates

Nainital Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

PNB FD Interest Rates

PNB FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

RBL Bank FD Rates

RBL Bank FD Rates

Saurashtra Gramin Bank FD Interest Rates

Saurashtra Gramin Bank FD Interest Rates

SBI FD Interest Rates

SBI FD Interest Rates

Shriram Finance FD Interest Rates

Shriram Finance FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Travancore FD Interest Rates

State Bank of Travancore FD Interest Rates

Syndicate Bank FD Interest Rates

Syndicate Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

UCO Bank FD Interest Rates

UCO Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Union Bank of India FD Interest Rates

Union Bank of India FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Yes Bank FD Interest Rates

Yes Bank FD Interest Rates

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FAQs

  • Is overdraft on FD good or bad?

    Overdraft is a good option over breaking your FD as interest is charged only on the used overdraft amount. This interest on overdraft is updated daily till the amount is repaid.
  • Is a bank overdraft better than a loan?

    Overdraft is a better option if you need a small amount at low-interest rates immediately to cover urgent expenses. Customers prefer loans when large funds are required for major financial commitments. Generally, banks charge both overdrafts and loans at the same interest rates.
  • What is the disadvantage of a loan against FD?

    Listed below are some of the disadvantages of a loan against FD:
    • Bank can foreclose the FD account to recover the loan in case of default in repayments by the customer
    • The customer may lose the investment and interest both on the seizure of the FD account
    • The duration of loan repayment cannot extend more than FD tenure
    • If unsure of your capability in future for loan repayment, it is better to break your FD.
  • How do you break an FD without penalty?

    Few banks in India provide the facility to their customers to break their FD investment and switch to other investment options of the bank without charging any penalties. However, the banks charge 0.5-3% of the interest rate on the FD amount if premature withdrawal from the FD account is done any time before 7 days of FD tenure.

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^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
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