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.

Returns as high
as 7.1%^##

Includes life cover

Completely Tax free^{^}

We are rated^~

7.7 Crore

Registered Consumer

Insurance Partners

4.2 Crore

Policies Sold

In-built life cover

Get Guaranteed returns upto 7.1%* With Life Cover

Your Name

+91

Mobile Number

View Plans

Your personal information is secure with us

By clicking on ''View Plans'' you, agreed to our Privacy Policy and Terms of use Tax benefit is subject to changes in tax laws

Get Updates on WhatsApp

We are rated^~

7.7 Crore

Registered Consumer

Insurance Partners

4.2 Crore

Policies Sold

Disclaimer: *The Guaranteed Returns are dependent on the policy term and premium term availed along with the other variable factors. 7.1% rate of return is for an 18 years old, healthy male for a policy term of 20 years and premium term of 10 years with Rs.10,000 monthly installment premium. All plans listed here are of insurance companies’ funds.

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

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

Tax on Profit

Taxable

Risk

Low Risk

Debt Mutual Fund

Returns Before Tax

8% ^(TAXABLE)

Returns After Tax

5.5%

Guaranteed Returns

Life Cover

Tax on Profit

Taxable

Risk

High Risk

VIEW PLANS

*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:

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
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
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)
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
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

Benefits of Loan against Fixed Deposit

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

Cheaper Interest Rates

The loan on FD is offered at cheaper interest rates than the rates of personal loans.
Hassle-free Loan Processing

The loan or overdraft on Fixed Deposit account is fast and hassle-free.
No Processing Charges

Banks and NBFCs impose no charges on the processing of loans on FD.
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.
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.
No Penalty on Pre-Payment

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

Bank FD Interest Rates

Bank FD Calculator

NRI-NRE FD Rates

Allahabad Bank FD Interest Rates

Andhra Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

Axis Bank FD Rates

Bajaj Finance FD Interest Rates

Bandhan Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Expand

Allahabad Bank FD Calculator

Andhra Bank FD Calculator

AU Bank FD Calculator

Axis Bank FD Calculator

Bajaj Finance FD Calculator

Bandhan Bank FD Calculator

Bank of Baroda FD Calculator

Bank of India FD Calculator

Expand

HDFC NRE FD Rates

Maybank Malaysia FD Rates

SBI NRI FD Rates

Axis NRI FD Rates

Maybank Singapore FD Rates

Yes Bank NRI FD Rates

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.

†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

* Applicable for Titanium variant of Max Life Smart Fixed-return Digital (Premium payment of 5 years, Policy term of 10 years) and a healthy male of 18 years old paying Rs. 30,000/- monthly (exclusive of all applicable taxes)

** Fixed deposit rate applicable for 5 year's 1 day to 10 years for investment amount less< 2 Crore ( Not for senior citizens).

*** PPF interest rate applicable for 15 years for investment amount upto 1.5 Lac

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

#Discount offered by insurance company

## The Guaranteed Returns are dependent on the policy term and premium term availed along with the other variable factors. 7.1% rate of return is for an 18 years old, healthy male for a policy term of 20 years and premium term of 10 years with Rs.10,000 monthly installment premium. All plans listed here are of insurance companies’ funds.

~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ