18 Banks offering Personal Loan against FD

Many a times, even a perfect investor with best investment products under his/her kitty can face short term money crunch.

And during such difficult phase, these individuals have following four traditional options to arrange money:

  1. Prematurely withdraw money from the investments – E.g. if the person has invested money in shares, then he/she can sell the stocks and raise money. However, at the time of selling the stock, there is no guarantee that the stock will give positive return. And assuming the money needed is on a urgent basis, he/she may have to sell the stock at a price lower than the invested amount.
  2. Ask friends/relatives – This also is a highly recommended option to raise money at the time of emergency. And if it works, then nothing better, as the person lending you money won’t charge any interest. However it is highly recommended, that borrower should repay money along with some interest. This way, friend or relative won’t be at loss since they could’ve invested that money elsewhere and earned interest. But if option doesn’t work, then individual will have to look for other means.
  3. Ask employer – There are many employers who offer loan to their employees. However availing loan from the company you work for, depends on various factors such as – loan amount required, employees tenure and so on. Again
  4. Apply for personal loan with bank – This is the most common solution to meet the financial crunch. However it is expensive, as banks charge a very high rate of interest.

But there is another option, which many people are not aware which is – personal loan against fixed deposit.

List of Banks offering personal loan against FD

Financial InstitutionMax. Loan Amount Offered i.e. % of FD AmountInterest Rate
Citibank IndiaUp to 90%2% above FD rate
United Bank of IndiaUp to 90%1% above FD rate
State Bank of IndiaUp to 90%1% above FD rate
HDFC BankUp to 90%2% above FD rate
Bajaj FinservUp to 90%2% above FD rate
Bajaj FinservUp to 60%2% above FD rate
Axis BankUp to 85%2% above FD rate
Federal BankUp to 90%2% above FD rate
ICICI BankUp to 90%2% above FD rate
Deutsche BankUp to 90%2% above FD rate
Karur Vysya BankUp to 90%2% above FD rate
Mahindra Finance60% to 75%2% above FD rate
Dena Bankup to 85% to 90%2% above FD rate
Central Bank of IndiaUp to 90%2% above FD rate
IIFL Holdings LimitedUp to 90%2%-3% above FD rate
Diwan Housing Finance LimitedUp to 75%2% above FD rate
Abhyudaya BankUp to 90%1% above FD rate
Canara BankUp to 90%2% above FD rate

Note: There are many other banks offering such type of loan. So it is recommended to contact your bank where you hold FD account.

Benefits of Overdraft Loan

Fastest Loan: Loan against term deposit is considered to be the fastest loan. Meaning, the loan amount is disbursed within 24 hours of successful application procedure. This is because the documentation is minimal as the bank already has sufficient details of the applicant.

Low interest rate: Since loan against FD is a secured loan, the interest rate charged is low compared to traditional loan. Typically banks offer 7% interest annually on the FD account. So when loan is taken against fixed deposit, the rate of interest is 2% to 3% higher than the FD interest. So rate of interest becomes 9%, which is very low compared to traditionally taken personal loan where the interest charged is minimum 16%.

Cost effective:

  • The interest is charged only when the loan amount is utilized.
  • Interest is charged only on the amount utilized and not on the entire loan amount.
  • No prepayment penalty.
  • There is no processing charge.
  • Investor continues to earn interest on the FD account.
  • Investor continues to remain the owner of your fixed deposit account.


  • Tenure of loan is not greater than the FD tenure.
  • Loan amount granted varies for each bank.
  • Investor can renew the FD account and at the same time renew the loan tenure.
  • Your FD is marked as lien and attached to the loan. Meaning, if you are not able to repay the loan amount, then banks have right to use FD amount to recover their money.

Author Bio:

Hi, I am Nikesh Mehta owner and writer of this site.

Nikesh Mehta - ImageI’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.

I can be reached at [email protected]. You may also visit my LinkedIn profile.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.