Liquid Asset Overdraft

Loan Against Fixed Deposit

Borrow smart without breaking your savings. Access instant liquid cash limits up to 90% of your FD value with lower interest rates and zero paperwork processing.

Lower Interest Rates

Pay nominal interest rates pegged strictly at 1% to 2% above your asset's earning FD rate.

Avoid Break Penalties

Keep your main Fixed Deposit compounding active. Avoid premature closure fees or interest losses.

Pay Only for Used Funds

Enjoy an overdraft credit line. Pay interest strictly on the exact amount and duration of money utilized.

Smart Liquidity

How Does FD Overdraft Work?

A loan against Fixed Deposit is structured as a secured overdraft (OD) facility. Here is a review of its core rules:

Credit Line Limit: Banks establish a credit line up to 90% to 95% of your FD's principal value. (e.g. an FD of ₹10 Lakhs yields a credit line of ₹9 Lakhs).
Interest Accumulation: If you withdraw only ₹1 Lakh for 10 days, you pay interest only on ₹1 Lakh for those 10 days. The remaining ₹9 Lakhs of the FD continues to compound interest in the background.
No Fixed EMIs: Enjoy absolute repayment flexibility. Settle the balance in lump sums or partial amounts anytime before the maturity of the underlying Fixed Deposit.

Up to 90% Limit

Zero Processing Fees

Since the bank holds your Fixed Deposit as collateral, there is zero credit risk. As a result, banks process these overdraft setups instantly online with zero processing fees and zero credit score inquiries.

✔ No income documentation checks
✔ Low interest spreads (1-2% above FD)
✔ Instant online activation via app

FAQs

Frequently Asked Questions

Find immediate answers regarding borrowing against Fixed Deposits.

What is a Loan Against Fixed Deposit?

A Loan Against Fixed Deposit is a secured loan/overdraft facility offered by banks where you use your active Fixed Deposit as collateral. The bank opens a credit line on your account, allowing you to borrow cash without prematurely breaking the compounding FD.

How much interest is charged on FD loans?

The interest rate charged on a loan against FD is linked directly to the FD's yield rate. Banks typically charge a markup of 1% to 2% above the interest rate you are earning on the deposit. Interest applies only to the amount you withdraw, not the entire limit.

What happens if I fail to repay the overdraft balance?

If you fail to repay the outstanding overdraft balance by the time the Fixed Deposit matures, the bank has the legal right to settle the outstanding dues directly from the FD maturity proceeds, releasing the remaining cash balance to your savings account.