State Bank of India gives the flexibility to use a loan against your FD in order to fulfill immediate cash needs. It is a beneficial choice because it guarantees that the privileges you reap from the Fixed Deposit account remain unchanged and delivers the loan at slightly cheaper rates if opposed to an unsecured loan. The minimum/maximum amount that can be borrowed is Rs. 25,000 up to a limit of Rs. 5 crore for the loan or overdraft facility. That being said, the amount should not surpass 90 percent of the overall amount deposited on the fixed deposit account.
Eligibility required for SBI loan against FD
One must meet with the following eligibility criteria to apply for a loan:
- This loan is eligible for use by single or joint depositors having SBI Fixed Deposits.
- By online banking against their TDR and STDR, single account holders can also take the use of an overdraft facility. For depositors who need to run an overdraft account, this can conveniently be performed electronically.
- Before the application is approved by the bank, both primary and secondary holders must accept the loan request in case of joint holders.
- In the circumstance that any one of the holders have not signed the loan application form, the bank will reject the application and the loan will not be processed.
- You are not eligible to apply for a loan if you have an SBI Tax Saving Fixed Deposit account.
The reimbursement term is the duration during which, along with the accumulated interest, the loan balance is to be repaid to the bank. In order to evade the late payment fine, the bank recommends to the borrower an acceptable repayment timeline under which they need to reimburse. After carefully evaluating the borrower's credit worthiness, this period/schedule is introduced. In the case of STDR/e-STDR, the loan balance must be repaid within 5 years, and it is limited at 3 years for TDS/e-TDR.
Key benefits of SBI loan against FD
Instead of breaking FD, the following are the advantages that one can reap by applying for a loan against FD:
- Depositors are eligible to take advantage of a loan of up to 90% of their fixed deposit or time deposit account.
- Interest is levied 1% above the nominal interest rate of SBI FD and the interest is levied on a regular reducing balance which also cuts the interest rate.
- Apart from the loan facility, overdraft facility is also provided by SBI
- There is no processing fee and even if the recipient pays the entire debt balance in advance, no penalty is imposed.
SBI Loan Against FD Interest Rate
|Type of deposit||ROI|
|Domestic Time/Fixed Deposit||1% above the nominal interest rate of SBI FD|
|NRE Fixed Deposit||1% above the nominal interest rate of SBI FD|
|NRO Fixed Deposit||1% above the nominal interest rate of SBI FD|
|FCNR (B) Deposit||2.90% above the 1-year MCLR|
Procedure to open an overdraft account against SBI FD
One must have an active OD Account to obtain an overdraft amount. One can either step into the closest SBI branch and open the Overdraft A/c, or they can use the online option if they have an online term deposit account. For this service, customers having domestic term deposits can conveniently apply. Measures for applying electronically for an overdraft account against a fixed deposit account of SBI are described below:
- Sign in to your SBI net banking account using the required credentials i.e. User ID and Password.
- Under the menu section click on the e-Fixed Deposit option
- Now opt the 'Overdraft against Fixed Deposit' option
- Now your active deposits will be displayed on your device screen, select one deposit against which you are willing to apply for an overdraft.
- Now click on 'Proceed' and confirm the overdraft amount, interest rate applicable on overdraft, and expiry date
- Now you will get a High-Security Password on your registered mobile number, authenticate the same by entering it in the space required.
- Once you are done your account will be activated successfully.