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Fixed deposits are one of the safest and risk-free investments among the financial products available. In case of emergencies, you can easily avail of a loan against FD to meet your needs. The concept of taking a loan against a fixed deposit may not be that popular. You may be confused thinking how much loan can I get against my FD.

Let us understand the simplified idea of loan against deposit, the benefits of loan against FD and much more here.

What is Loan against Fixed Deposits (FD)?

Loan against FD is a type of loan where your fixed deposit is held as collateral. To put it simply, you pledge it as security for a loan. When you are in need, you can take the overdraft against your deposited money as a loan against a fixed deposit from the bank.

Like any other loan, the loan against FD is paid to the borrower in a single shot and repaid by the borrower as equated monthly instalments. Your loan amount can go up to 70% to 90% of the deposit money and it depends on the lender. The terms and conditions including rate of interest, repayment tenure for a loan on fixed deposit varies from lender to lender.

When the banks give a loan against FD, they charge 2 - 3 percent higher than the existing FD interest rate. Suppose the interest rate of the FD opened by the depositor is 7%, then the interest rate on loan against FD would be 9%.

You can apply for a loan against FD online too. However, the banks also have a cap for online loans against fixed deposits. If you need an amount higher than the one available online, you should visit the nearest bank branch.

The facility of loan on FD acts like a solution to the losses you will face when you withdraw FD prematurely. Suppose you have an FD of Rs. 15 lakh in a bank and you are in need of Rs. 5 lakh.

Instead of liquidating an FD, a loan against FD would be a better option. This is to avoid the penalty on the premature withdrawal of FD.

In majority of the cases, a loan against FD would be more economical rather than paying the penalty, especially when the borrower can prepay it. But if you are not sure whether you would repay the EMI on time, it is better to liquidate the FD. Please note that any default on a loan against FD can impact your credit score.

Eligibility Criteria to Get a Loan Against Fixed Deposits

The basic criteria to get a loan against FD is holding a fixed deposit with the bank/financial institution you’re seeking a loan from. However, you should also be one of the following:

  • Resident Indian citizens

  • Hindu undivided family

  • Family trusts

  • Sole proprietorships, partnership firms, and group companies

  • Clubs, associations, and societies

Here’s an additional list to determine if you can apply for a loan against fixed deposits:

  • Individual as well as joint fixed deposit account holders

  • FD in the name of a minor does not qualify

  • 5-year tax-saving FD account holders cannot opt for this type of loan

Benefits of a Loan against FD

  • Low-Interest Rates

The rate of interest on a loan against fixed deposit is much lower than other types of loans. In fact, it is just 2% to 3% higher than the interest on fixed deposits. Let’s understand this with an example.

Roshni, a 35-year-old woman, is seeking a loan. She gets 7.45% interest on her fixed deposit account. Hence, her interest on loan against FD is only 8.75%. However, most banks charge 10.5% to 24% interest on any other type of personal loan.

  • Flexible Loan Repayment Period

The tenure of your loan against fixed deposits is the same as the duration of your FD. For instance, if the tenure of your fixed deposit is 5 years, the loan repayment duration will also be 5 years.

However, please note that the loan period can be lesser than the tenure of your FD, but never more than it. So, in the aforementioned example, the loan repayment period can be less than 5 years, but can’t exceed it.

  • Zero Processing Fee

Unlike other loan options, the one taken against your FD requires no processing charges. This further reduces the overall cost of getting a loan.

  • Available for Both Domestic and NRI FDs

A loan against FD is available from banks for both domestic and NRI fixed deposits.

  • No Prepayment Charges

The bank loses money on interest when you pay off a loan early. To compensate for that, banks will charge you a penalty. Most of the banks in India follow this practice. However, no penalty is charged on the prepayment of loan in the case of a loan against an FD since the bank does not lose money on the interest.

  • Seamless Application Process

Applying for a loan against FD is hassle-free. You can submit the application for loan against fixed deposit online also.

  • No Need of Credit Score

Your credit or CIBIL score will not be taken into account while determining the eligibility for a loan against FD. So, this is beneficial to many individuals who do not have a credit score because they have not availed any facilities like credit cards or personal loans before.

  • Near to Zero Documentation

Since you are already a fixed deposit account holder, you do not have to go through the tedious documentation process. All you need to do is fill in and submit the required forms for a deposit loan.

  • No Need to Break Your Deposit

There can be instances where you would be forced to break your fixed deposit to address unforeseen financial emergencies. You don’t have to worry if the bank does not give a loan against any of the securities you have.

The concept of loan against FD allows you to manage such events while keeping your savings intact.

How to Apply for a Loan Against FD Online?

  • Log in to your desired financial institution’s website.

  • Go to the ‘Fixed Deposit’ section.

  • Select ‘Overdraft Facility against FD’.

  • Provide relevant details like the required loan amount, tenure, etc.

  • Since it is an online process, you’ll receive notifications regarding your loan application via SMS or email.

Features of Loan Against FD Offered by Our Partners

Here are some of the important features of loan against FD offered by different lenders.


Loan Amount

Interest Rate

Processing Charges

Repayment Tenure


Up to 90% of the FD value

At bank’s discretion


Remaining tenure of FD

State Bank of India

Up to 90% of the FD value

At bank’s discretion


Remaining tenure of FD

Yes Bank

Up to 90% of the FD value

1% higher than the maximum fixed deposit interest rate


Remaining tenure of FD

Axis Bank

Up to 85% of the FD value

2% higher than the prevailing interest rates


Remaining tenure of FD

Union Bank

Up to 90% - 95% of the FD amount

2 -3% higher than the prevailing interest rates



Remaining tenure of FD

RBL Bank

Up to 90% of the FD amount

2 -3% higher than the prevailing interest rates



Remaining tenure of FD

Citi Bank

Up to 90% of the FD value

At bank’s discretion


Remaining tenure of FD



Loan Amount

Interest Rate

Processing Charges

Repayment Tenure

Bajaj Finance

Up to 75% of the deposit amount for cumulative FD and up to 60% of the deposit amount for non-cumulative FD

2% more than the prevailing interest rates


3 months from the day of investment to the remaining tenure of FD

PNB Housing Finance

Up to 75% of the total principal deposit

2% higher than the maximum fixed deposit interest rate


Remaining tenure of FD

At Bajaj MARKETS, we have devised multiple financial products that offer lucrative, secure, and easy loans against FD and other collaterals. You can contact us and our experts will help you identify the right loan option and guide you through the whole process.  





FAQs on Loans Against FD

✔️Is it good to take a loan against FD?

Getting a loan against FD is ideal if the loan amount is less than the deposit. Let’s say your loan requirement is ₹4,00,000 and your account has ₹10,00,000. Taking a loan against it would be a better option than liquidating your deposit. By liquidating your FD, you lose out on the money that could have been compounded as interest. Moreover, you might have to pay a penalty for premature withdrawal of FD.

✔️How can I repay my FD loan?

You can repay your loan against FD in equated monthly installments online. There’s no penalty for the prepayment of your FD loan.

✔️What is the interest rate for loans against FD?

Financial institutions typically charge an extra 2-3% above the FD rate. If your fixed deposit rate is 6%, the interest on the loan against it would most likely be 8%.

✔️What happens if I fail to repay the loan taken against FD?

The bank or the financial institution will utilise the money parked in your fixed deposit account to recover the money.