Rules, safety & services
Loan Against Fixed Deposit
Borrow up to 75%–95% of your FD at FD rate + 1%–2% — as a loan or overdraft, without breaking the deposit. Rules, cost and examples.
Updated 30 September 2026 · 25 banks trackedHighest FD rate now
7.45%
Bandhan Bank · 2 – <3 yearsWhat you need to know
A loan or overdraft against FD lets you borrow against your deposit while it keeps earning interest. Because it is fully secured, there is no credit check and the rate is just 1%–2% above your FD rate. Tax-saver FDs cannot be pledged.
Key terms
| Parameter | Typical terms |
|---|---|
| Amount | Usually 75% – 95% of the deposit (incl. accrued interest at some banks) |
| Interest rate | FD rate + 1% to 2% |
| Tenure | Up to the FD’s remaining term |
| Form | Term loan or overdraft (pay interest only on the amount used) |
| Processing fee | Usually nil |
| If unpaid | Bank adjusts the dues from the FD on maturity |
Cost comparison — ₹1 lakh needed for 6 months
| Option | Cost |
|---|---|
| Break a ₹2 lakh FD @ 7% | Lose ~1% penalty plus lower rate on the whole deposit |
| Overdraft @ 8% on ₹1 lakh | ≈ ₹4,000 interest for 6 months; FD keeps earning 7% |
| Personal loan @ 12%+ | ≈ ₹6,000+ interest plus fees |
Frequently asked questions
Does my credit score matter?
Not much — the loan is fully secured by the FD.
Can I take a loan against someone else’s FD?
Only with the depositor as co-borrower/consent; joint FDs need all holders to sign.
Information is for education and comparison. Rates and rules change — confirm with your bank and a tax adviser before investing. FinancePortal is not a financial or tax adviser.