Loan Against FD - Fixed Deposit

What is a Loan Against a Fixed Deposit?

A loan against an FD lets you borrow money without closing the FD until it matures, using it as collateral. This facility will help you meet urgent financial needs while still earning interest on your deposit. Interest charged generally ranges from 1% to 3% above standard FD interest rates. In addition, you can use a credit card against FD facility, making it a cost-effective option for medical treatment, travel, education, or other short-term commitments.

List of Banks Offering Loans Against FD in 2026

Let us get a quick overview of some of the best banks offering the facility of a loan against fixed deposit in the table below:

1. ICICI Bank Loan Against FD

   ICICI Bank Loan Against FD allows customers to access up to 90% of their deposit value without closing their FD. Interest is charged only on the utilised amount through an overdraft facility, with quick digital processing via net banking and the mobile app. Repayment remains flexible up to the FD’s maturity period.

2. Axis Bank Loan Against FD

   Axis Bank Loan Against FD offers a simple and reliable way to meet short-term financial needs while continuing to earn interest on fixed deposits. Customers can avail up to 85% of the FD value at competitive rates linked to returns, with quick approval and minimal documentation. Repayment remains flexible up to the FD’s maturity period.

3. Union Bank Loan Against FD

   Union Bank Loan Against FD enables customers to access funds easily by pledging their fixed deposits without affecting long-term savings. It provides loans up to 90% of the value of the FD at lower interest margins as compared to the unsecured loans, an easy application procedure, and less paperwork. Repayment can be done until the maturity of the FD.

4. Yes Bank Loan Against FD

   Yes Bank Loan Against FD offers its customers the opportunity to unlock the value of their fixed deposit and retain liquidity and financial stability. It gives you the choice of either a term loan or an overdraft facility. Also, there is no prepayment fee and no foreclosure fee, and only interest is paid on the amount used. Another advantage of the facility is that it permits simple renewal or extension associated with FD maturity.

5. Canara Bank Loan Against FD

   Canara Bank Loan Against FD is a safe and inexpensive means of fulfilling temporary financial requirements without closing your fixed deposits. It is more favourable to senior citizens and long-term depositors, simple in processing by the branch, and the proceeds of maturities of an FD can be linked to repayment. The facility can be applied for by both individual and joint FD account holders.

6. State Bank of India Loan Against FD

   State Bank of India Loan Against FD offers an affordable and convenient way of financing to customers who need to get quick financing without having to close their fixed deposits. The facility is offered both in branch and on digital platforms, with the opportunity to upgrade it to an overdraft account. It also provides special treatment to government and pension account holders, with a comprehensive network of branches throughout the country.

7. Bank of Baroda Loan Against FD

   Bank of Baroda Loan against FD allows the customers to conveniently access money by using their fixed deposits and still receive interest. It has both cumulative and non-cumulative FDs, and existing account holders have a simple documentation process. It also permits linking repayment with maturity proceeds and assists through an extensive branch network.

8. HDFC Bank Loan Against FD

   HDFC Bank Loan against FD provides a quick and digitally enabled financing solution to customers who prefer instant access to finances without closing their fixed deposits. It offers immediate approval with net and mobile banking, high loan eligibility of up to 90% of the value of the FD, and an exclusive overdraft facility to offer flexibility of withdrawals. The facility also favours the smooth renewal and closure that is associated with the FD maturity.

9. Kotak Mahindra Bank Loan Against FD

   Kotak Mahindra Bank Loan Against FD offers an easier and flexible means of accessing the funds of fixed deposits without interfering with long-term savings. It gives the option of customisation of loan limits depending on the term of deposit and has an integrated overdraft account where customers can easily manage funds. The facility is available in branches, phone banking, and digital channels with quick lien marking to existing FD holders.

10. Punjab National Bank Loan Against FD

    Punjab National Bank Loan Against FD offers a dependable and affordable financing option for customers who want quick access to funds while keeping their fixed deposits intact. It provides special concessional terms for pensioners and senior citizens, along with a simple loan renewal facility linked to FD maturity. With low administrative charges and wide availability across urban and rural branches, the facility ensures easy access and convenience.

Who all can apply for a loan against FD?

• Eligible Holders:

  Any individual account holder (resident or NRI), joint account holders, sole proprietorships, partnerships, and Hindu Undivided Families (HUFs) who own the deposit.

• Age Requirement:

  The primary applicant must be a major, typically at least 18 years old.

• Zero Credit Check:

  No income proof, salary slips, or high credit scores are required, as the bank uses your existing deposit as a 100% secure guarantee.

• Strict Exclusions:

  Loans cannot be issued against Tax-Saver FDs (due to a mandatory 5-year lock-in) or FDs opened solely in the name of a minor.

• Borrowing Limit:

  You can instantly borrow a flexible credit or overdraft limit of up to 90% to 95% of your total underlying FD value.

Banks do not give loans against FD to the following persons:

• Persons under lien/ restraint/ encumbrance
• On the FD account of a minor person
• Loan on Tax Saving FDs

Benefits of a Loan against a Fixed Deposit

Now, let us understand the top benefits of a loan against a Fixed Deposit as follows:

• Cheaper Interest Rates: The loan on an FD is offered at cheaper interest rates than the rates of personal loans.
• Hassle-free Loan Processing: The loan or overdraft on a Fixed Deposit account is fast and hassle-free.
• No Processing Charges: Banks and NBFCs impose no charges on the processing of loans on FD.
• Least Paperwork: As the customer already holds an account with the bank with the required documentation, hefty paperwork is not required to get a loan on an FD with an overdraft.
• No Need for a Credit Score: To get a loan on FD, the general loan parameters like credit score or income limit are not taken into consideration. The bank secures the FD amount as the pledge.
• No Penalty on Pre-Payment: Banks and lending institutions do not penalise for repayment of the loan amount in advance.
• Avoid Premature Withdrawal: The customers need not prematurely close their FD account and lose their investment returns.

Key Takeaways

A loan against FD is a convenient and cost-effective way to access short-term funds without closing your savings. It offers higher loan eligibility, lower interest rates than unsecured loans, minimal documentation, and fast processing. This facility assists individuals and businesses in meeting urgent financial needs, regardless of long-term financial stability, by offering flexible repayment options and maintaining interest income on the FD.

FAQs