Loan Against FD SBI

The Loan against FD by SBI Bank is inarguably the most trusted facility to get a loan on fixed deposits by citizens in India. The bank provides loan/ overdraft funds to help you with urgent financial needs like education expenses, loan repayments, and holiday expenses.

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Let us learn the features and delve into the details of this facility further.

What is Loan Against FD SBI Bank?

Loan against FD from SBI Bank provides seamless fund liquidity of up to 95% of your Fixed/Time Deposits. You can avail of a loan and overdraft facility for a certain time without the need to break your FD. The process is quick and easy for existing FD account holders.

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

Features of SBI Bank Loan Against FD

The features of a Loan Against FD from SBI Bank are mentioned in the table below:

Features Details
Types of Loans on FD Loan on Demand & Overdraft 
Loan Against FD Limit 95% of Fixed/ Time Deposit Value
Overdraft Loan Amount Limits Rs. 5000- Rs. 5 crores
SBI Overdraft Interest Rate
  • 1% higher than normal FD interest rates
  • Charged only on the decreasing loan balance
Charges & Fees Zero Processing Fees
Penalties No penalty on early repayment of loans
SBI Bank Overdraft Repayment
  • STDR/ e-STDR Accounts: 5 Years
  • TDR/ e-TDR Accounts: 3 Years
Credit Card Against FD Available: SBI Unnati Credit Card
Modes to Get a Loan Against FD YONO app/ Internet Banking/ SBI Branches

SBI Bank Loan Against FD Repayment

The conditions of FD loan repayment period of SBI Bank are mentioned in the list below:

  • The bank fixes the period of overdraft loan repayment based on the borrower’s repayment capability.

  • For overdraft loans against FD availed online the repayment period limits are as follows:

  • STDR/ e-STDR Account Holders: 5 Years

  • TDR/ e-TDR Account Holders: 3 Years

Eligibility Criteria for SBI Bank Loan on FD

The customers falling into the below-mentioned eligibility criteria can avail of an Overdraft/ Loan against SBI FD from SBI Bank:

  • Single/ Joint Life Fixed Deposit Accounts

    • For Resident Citizens: TDR/ STDR/ RD Accounts

    • Non-Resident Citizens: NRE/ NRO/ RFC/ FCNR (B) Accounts

  • Public/ Private Companies

    • Single Owner Companies: TDR/ STDR/ RD Account Holders

    • Partnership Firms: TDR/ STDR/ RD Accounts Holders

  • FD Tenure Criteria 

    A sufficient Fixed/ Time Deposit tenure must be remaining to avail of a loan against FD.

  • Overdraft through Net Banking 

    The SBI Bank overdraft facility is available through Net Banking for Single Life accountholder holding a TDR/ STDR account.

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How to Apply for SBI Bank Loan against FD?

The process to apply for the Loan Against FD from SBI Bank is as follows:

Step 1: Log in through Net Banking or the official website of the SBI Bank 

Step 2: Click on the option “e-Fixed Deposit”

Step 3: Select “Overdraft Against Fixed Deposit”

Step 4: Choose your Fixed Deposit Account

Step 5: Click on “Proceed” 

Step 6: Read the details carefully and press “Submit”

Step 7: Enter the NetSecurity Password sent on your registered mobile number. This will open your Loan/ Overdraft account.

Advantages of Loan Against Fixed Deposit of SBI Bank

Let us have a look at the major benefits of a Loan Against FD from SBI Bank in the list below:

  1. Liquid Funds Available on Demand

    You can avail of fund liquidity on their fixed deposits if in need of immediate money for a short term.

  2. No Breaking of FD is Required

    To raise a loan against FD, you are not required to break your FD and lose on your returns.  

  3. Low-interest Rate on Loan Against FD

    The loan against FD interest rates is levied at a low-interest rate of only 1% above the normal FD interest rates. Also, you need to pay the interest only on the updated balance loan amount after repayments.

  4. Zero Loan Processing Fees

    SBI Bank does not charge any loan-processing fee for providing an overdraft loan on FD.

  5. Rational Method to Fix Repayment Period

    The loan repayment period is determined based on an individual’s repayment capacity and other financial commitments.

  6. Earn Interest on FD

    You continue to earn SBI FD interest on fixed deposit investments. SBI Bank discharges only a part of the deposits as a loan at a small amount of interest rate.

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

Disadvantages of Loan Against Fixed Deposit of SBI Bank

A few of the Loan against FD disadvantages are listed below:

  • SBI Bank does not give a loan against FD for accounts in the name of minors.

  • You cannot avail of a loan on FD accounts that are under lien, mortgage, or encumbrance.

  • All the Joint Life account holders and business owners need to bear the loan repayment responsibility.

  • You are not allowed to close off the FD account after raising a loan on FD.

  • SBI Bank can foreclose your FD account if you fail to repay the loan within the stipulated time.

In a Nutshell

SBI Banks’ overdraft facility with multiple features is a good option for people who need immediate financial support. The loan is provided at comparatively low-interest rates, a flexible repayment period, and an attractive credit card against the FD facility. Also it is suggested to have a look on highest bank FD rates before taking investment decision in FD.

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FAQs

  • Can I take a loan against my Fixed Deposit in SBI?

    Yes, you can take a loan against your fixed deposits if you are a Resident citizen with a Single life or Joint Life STDR/TDR banking account or if you are an NRI citizen holding an NRE/ NRO/ FCNR account.
  • What is the interest rate on a loan against FD in SBI Bank?

    The SBI Bank charges an interest rate of 1 % above the Time Deposit interest rates for availing a loan against FD.
  • How to close an overdraft account in SBI Bank?

    You can close your overdraft account upon maturity or the end of the FD term by visiting your nearby SBI branch.
  • What is an overdraft against FD in SBI?

    The overdraft facility of SBI Bank provides the fund liquidity facility to its FD account holders. Interest is levied only on the loan amount availed and the interest rates are updated in real-time.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

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