State Bank of India offers loans against FD where you can borrow money against your existing fixed deposit (FD) with the bank. The interest rate for this loan is calculated on the daily reducing balance of the loan, which can further reduce the effective interest rate. SBI Loan against FD can be a good option if you need quick access to funds without breaking your FD and losing out on the interest you’ve earned.
You can get a loan up to 90% of the value of your FD. SBI offers both demand loans and overdraft facilities, with interest rates typically 1% above the interest you earn on your FD.
Features of Loan Against FD by SBI
Here is the table summarizing the details of the SBI Loan Against FD:
Personal Loans by Banks
The table below shows the money loan interest rates and processing fees offered by the top banks.
| Feature | Details |
|---|---|
| Loan Amount | Up to 90% of the value of your Time Deposit |
| Loan Type | Demand Loan & Overdraft on FD |
| Interest Rate | 1% above the relative time deposit rate |
| Margin |
|
| Minimum Loan Amount (Online) | ₹5,000 |
| Maximum Loan Amount | ₹5 Crore |
| Processing Charges | Zero |
| Prepayment Penalty | No |
| Security | Lien on underlying Time Deposit |
| Channels | YONO & INB: Overdraft facility only Branches: Both Demand Loan and Overdraft facility |
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SBI Loan Against FD Interest Rates
The table below shows the interest rates for SBI loan against FD:
| Type of Time Deposit | Interest Rate |
|---|---|
| Domestic Time/Fixed Deposit | 1% over the interest rate paid to the depositor |
| NRE Fixed Deposit | 1% over the interest rate paid to the depositor |
| NRO Fixed Deposit | 1% over the interest rate paid to the depositor |
| FCNR (B) Deposit | 2.90% above the 1-year MCLR* (currently, MCLR for 1 year is 7.90%) |
Eligibility for SBI Loan Against FD
Here is the list of eligibility for SBI loan against FD:
Customers having the following SBI deposit accounts can avail the loan through branches:
- TDR (Term Deposit Receipt)
- STDR (Special Term Deposit Receipt)
- RD (Recurring Deposit)
- NRE/NRO deposits
- FCNR(B) deposits
The account can be held individually (single account) or jointly.
Eligibility for overdraft facility:
- Only single account holders can avail the overdraft facility against TDR and STDR.
- The TDR and STDR can be issued through both branch channel and online deposits (INB and YONO platform).
- Joint account holders are currently not offered this overdraft facility.
Step to Apply for SBI Loan Against FD
To get a loan against your fixed deposit in SBI, you can follow these steps:
- Step 1: Log in to your SBI net banking account.
- Step 2: Choose the e-Fixed Deposit option from the menu.
- Step 3: Select the “Overdraft against Fixed Deposit” option.
- Step 4: Pick one of your active deposits from the list and apply for an overdraft.
- Step 5: Confirm the overdraft amount, applicable interest rate, and expiration date, then click “Proceed”.
- Step 6: Enter the high-security password sent to your registered mobile number.
- Alternatively, customers can also visit the branch to avail this facility.
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Benefits of Taking a Loan Against Fixed Deposit with SBI
Here are the main benefits of opting for a Loan Against FD from SBI Bank:
- Immediate Access to Liquid Funds: You can access funds from your fixed deposit instantly when you need money for a short period.
- No Need to Break the FD: You don’t have to break your FD to get a loan, so you won’t lose out on your returns.
- Low Interest Rate: The interest rate for a loan against FD is only 1% higher than the normal FD interest rates. You only pay interest on the remaining loan amount after making repayments.
- No Loan Processing Fees: SBI Bank does not charge any fees for processing a loan against FD.
- Flexible Repayment Period: The repayment period is based on your ability to repay and other financial commitments.
- Earn Interest on FD: You continue to earn interest on your fixed deposit while using it as collateral for a loan. SBI Bank only uses a portion of the deposit as a loan at a low interest rate.
Things to Know When Availing a Loan against Fixed Deposits
Consider the following points if you plan to take a loan against your Fixed Deposits:
- Loans are only available against fixed deposits that are not under any mortgage or hindrance.
- Loans cannot be obtained against term deposits opened in the name of minors.
- If a personal loan is taken from a jointly opened FD, all holders of the deposit will be responsible for repaying the loan.
- After taking the loan, the depositor cannot close or break the fixed deposit account.
- The bank has the right to close the FD account used as collateral if the borrower fails to repay the loan amount.
Repayment Terms of SBI Loan against FD
The repayment period is the time period in which the loan amount and accrued interest must be repaid to the bank. The bank proposes a repayment schedule to the borrower, outlining the timeframe within which they need to make payments to avoid late payment penalties. The repayment schedule is determined after analyzing the borrower’s repayment capacity.
- For STDR/e-STDR (Special Term Deposit; offline/online), the repayment period is capped at 5 years.
- For TDS/e-TDR (Term Deposits; offline/online), the repayment period is limited to 3 years.
You can also take a loan against other assets, know more from the links below:
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