Indian Bank Loan Against FD

What is an Indian Bank Loan Against FD?

An Indian Bank loan against Fixed Deposit offers an overdraft facility for term deposits, available to retail net banking and mobile banking customers with individual accounts. The maximum loan against FD limit is ₹10 lakh for e-TDs and ₹5 lakh for physical term deposits, while the minimum overdraft limit is ₹1,000. A separate e-OD account is required for each term deposit, and the facility expires on the deposit’s maturity date. 

Key Features of Indian Bank Loan Against FD

Loan against FD Indian Bank has several useful features that make it easy to access funds while keeping the deposits intact. Here are the main features of this facility:

• Affordable Interest Rates: The interest rate for the loan against FD is just 1% above the applicable Indian Bank FD interest rates, making it a cost-effective way to borrow. At the same time, your deposit continues to earn returns.
• Special Rates for Staff: Indian Bank staff, including retired employees, can avail the loan at a reduced rate of just 0.50% above the fixed deposit rate.
• FD Stays Active: With an Indian Bank loan against FD, your fixed deposit continues to earn interest while being pledged as security, helping you meet financial needs without affecting the deposit.
• Flexible Repayment: Indian Bank allows you to repay the loan anytime, with a maximum period up to the fixed deposit's maturity date.
• Pay Interest Only on the Used Amount: In the Indian Bank Loan Against FD, you only pay interest on the amount you borrow. The interest rate is just 1%, helping you save money by paying interest only on the portion of the loan you use.
• Term Deposit as Security: The loan on FD at Indian Bank is secured by pledging your term deposit, ensuring a smooth and reliable borrowing process.

How to Apply for an Indian Bank Loan Against FD?

Applying for a loan against FD in Indian Bank is simple and can be done online or by visiting your home branch.

1. Online Loan Application

   Getting a Loan Against FD through NetBanking is simple and fast. Just follow these easy steps:

   • Log in to Net Banking: Visit Indian Bank’s NetBanking portal and log in.
   • Select Overdraft Option: Go to “Online OD Against Deposit” under deposit services.
   • Choose Your FD: Select the FD you want to use for the overdraft.
   • Enter Loan Amount: Enter the desired loan amount within the available limit.
   • Submit the Request: Review and confirm. The e-OD is created instantly.
   • OD Type: The loan is offered as an e-Overdraft against e-TDs.
   • Fully Online Process: The entire process is digital, and no branch visit is needed.

2. Offline Loan Application

   If you prefer applying offline, you can visit your nearest Indian Bank branch. Just follow these simple steps:

   • Visit the Branch: Visit the nearest Indian Bank branch where your FD is held.
   • Request for OD Against FD: Ask for the Loan/Overdraft Against FD application form.
   • Fill and Submit the Form: Complete the form with your details, FD, and loan amount.
   • Submit Documents: Provide your FD receipt and KYC documents.
   • Loan Processing: The bank will verify and process your request.
   • Overdraft Setup: The overdraft limit will be linked to your savings account once approved.

Who Should Consider an Indian Bank Loan Against an FD?

The Indian Bank loan against Fixed Deposit suits a wide range of customers. Here are some groups that can benefit from this facility:

• Individuals Facing Short-Term Cash Needs: Whether for medical emergencies, education fees, travel, or home repairs, this loan offers quick access to funds without impacting your savings.
• Tax-Saving FD Holders: If your tax-saving FDs are under a 5-year lock-in and you urgently need funds, a loan against them can help without liquidating the deposit.
• Small Business Owners and Self-Employed Professionals: Manage business expenses, vendor payments, or operational costs using the FD as collateral.
• People Avoiding High-Interest Loans: Instead of a credit card or unsecured personal loan, the Indian Bank loan against FD offers a lower-interest alternative.
• Existing Indian Bank FD Customers: If you already have a fixed deposit with Indian Bank, this facility can be quickly availed through NetBanking or by visiting your branch.

Repayment Options for Indian Bank Loan Against FD

The Indian Bank loan against FD offers flexible repayment options that make it easy to manage your cash flow:

• Repay Anytime: Indian Bank Loan Against FD provides you the flexibility to repay the loan at any time, without being tied to a fixed EMI schedule.
• Multiple Repayment Modes: Repayment can be made via NetBanking, NEFT, UPI, cheque, or branch deposit.
• No Prepayment Penalty: You can choose to repay the loan either in full or in parts, based on your convenience, without incurring additional fees.
• Auto Adjustment on FD Maturity: When your FD matures, any outstanding overdraft balance is automatically adjusted from the FD proceeds.
• Repayment from Other Accounts: You can repay the loan from any other account you hold with Indian Bank, giving you more flexibility in managing your repayments.

Key Takeaways

Indian Bank loan against FD lets you access up to 90% of your deposit while your FD continues to earn interest. You only pay interest on the amount you use, making it a simple and cost-effective way to manage urgent financial needs. The process is quick and available online and at your nearest Indian Bank branch. If you are looking for other options, apply for an Indian Bank credit card against FD.