
Introduction to Loan Against Fixed Deposit
If your credit score is low, you do not fulfill the income qualifying conditions, or you do not have any other assets to pledge for a secured loan, you can borrow against your Fixed Deposit.
Such loans have interest rates that are 1% to 2% higher than the FD rate and can be repaid over a period of up to 60 months. These loans are typically in the form of an overdraft or demand loan.
Top Banks Offering Loan Against Fixed Deposit
Name of the Bank | Interest Rate | Loan Amount |
Axis Bank | 2% above term deposit rate | Rs.25,000 onwards |
State Bank of India | 1% above the relative FD rate | Rs.25,000 to Rs.5 crore |
HDFC Bank | 2% above the FD rate | Up to 90% of your fixed deposit |
Federal Bank | 2% above the FD rate | Up to 90% of the deposit amount |
Karur Vysya Bank | 5% to 7% | Up to 90% of the deposit amount |
Deutsche Bank | 2% above the FD rate | Rs.25,000 onwards |
Eligibility Criteria for Availing Loan Against Fixed Deposit
To be eligible for a loan against FD, the basic criteria is that you must hold a fixed deposit with the bank you are availing the loan from and any of below-given individuals/entities can avail the loan:
- Resident Indian citizens
- Family Trusts
- Hindu Undivided Family (HUF)
- Clubs, societies, and associations
- Sole proprietorships, group companies, and partnership firms

Documentation Required to Avail Loan Against Fixed Deposit (FD)
To avail a loan against fixed deposit, you will need to provide the below-given documents:
- Application form duly signed
- Duly signed agreement
- Fixed/Term Deposit receipts duly discharged in favor of the bank
Please note that these may vary from lender to lender.
How to Obtain Loan Against Fixed Deposit
Except in a few circumstances when you must visit the nearest branch of the bank, most lenders allow you to apply for a loan against fixed deposit online. State Bank of India, HDFC Bank, Axis Bank, and Deutsche Bank are some of the banks that allow you to apply for a loan against a fixed deposit online through their respective websites. In the case of Federal Bank, you will need to go to the nearest branch.
Features and Benefits of Loan Against Fixed Deposit
- Lower interest rates – As your fixed deposit serves as collateral for a loan, the interest rate on these loans is lower. The interest rates on these loans are typically 2% to 2.5% lower than the interest rates on personal loans. As a result, the equivalent monthly instalments (EMIs) on these loans are cheaper as well.
- Minimal paperwork – The interest rate on these loans is lower because your fixed deposit serves as collateral for a loan. These loans often have interest rates that are 2% to 2.5% lower than personal loans. As a result, the EMIs (equivalent monthly payments) on these loans are also lower.
- No credit score check – When you apply for any kind of loan, lenders will have a look at your credit score before they offer you a loan. However, in the case of a loan against FD, your CIBIL or credit score will not be considered while evaluating your eligibility. Hence, such loans can be a good option for people who have low or no credit score.
- The loan amount will depend on the FD amount – If you need a personal loan, the maximum loan amount will be determined by a variety of factors such as your credit score, income, tenure, and so on. In the case of a loan against FD, however, the maximum loan amount is determined by the amount of money you have put in the FD account. This means that if you have put more in your FD, you will be eligible for a larger loan.
- No prepayment penalty – When you prepay any loan, the banks lose out on the interest and hence, they will charge you a penalty for the same. However, in the case of a loan against FD, no penalty is charged as banks do not lose out on the interest amount. Instead, they profit from it as they do not have to pay you any interest on the loan amount.