Need emergency money? Don't break fixed deposit, borrow against it

Loan against FD is given by banks as an overdraft facility
  • In case of an emergency, instead of breaking a fixed deposit (FD), you can get a loan against it.
  • Banks usually lend up to 90 per cent of the value of your FD. The limit varies from one bank to another. 
  • Loan against FD is given by banks as an overdraft facility.
  • The rate on such loans is 1 and 2 percentage points  above the FD rate. The tenure is up to five years.
  • If you fail to service the loan, the bank can foreclose your FD to recover its money.
  • This loan is not available on five-year tax saving FD.



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