Loan Against FD SBI

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

What is Loan Against FD SBI?

Loan Against FD from SBI Bank offers seamless fund liquidity, allowing you to access a term loan or an Overdraft facility without needing to prematurely close your FD. You can avail of a loan amount ranging from a minimum of ₹5,000 up to a maximum of 90% of the FD value. 

There are zero processing charges and no prepayment penalties. The loan is fully secured by placing a lien on your underlying FD. The FD interest rate is highly competitive, typically set at just 1% above the rate of the relative time deposit, with interest calculated on a daily reducing balance.

Features of SBI Bank Loan Against FD

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

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.

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.

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.

Wrapping Up

The Loan Against Fixed Deposit SBI facility provides an excellent solution for individuals who need immediate financial support without breaking their high-interest savings. The SBI overdraft facility is a top choice due to its competitive features: the low-interest rate (just 1% above the FD rate), a flexible repayment period, and the option to secure a credit card against the FD. Given that this loan is based on your deposit, it remains crucial to check the highest bank FD rates offered by SBI and competitors before making your initial FD investment decision.

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