Loan against FD (Fixed Deposit) is a type of secured loan where customers can pledge their fixed deposit as security and get a loan in return. The amount of the loan depends on the FD deposit amount. This can go up to 90% – 95% of the deposit amount.
Thereof, can I get home loan on fixed deposit?
No, you must not break your fixed deposit to get a home loan. As you know FD is a long term investment and there are zero market risks. You can borrow a home loan to purchase, construct, renovate and extend a housing unit. The loan will be given at about 75%-90% of the property value.
Beside this, can we withdraw FD before maturity in Andhra Bank?
Andhra Bank allows pre-mature withdrawal of term deposits on request made by the depositor. A penalty charge of 1% is levied on premature cancellation/withdrawal of fixed deposits. However, certain scenarios are exempted from paying the penalty charge as per the bank’s terms and conditions.
How can I close my FD overdraft?
Closure of Overdraft account : The closure of Overdraft account before or on maturity or end of term of TDR/STDR/eTDR/ eSTDR will be done through Home Branch only. Please note that, presently there is no provision in internet banking for closure of such Overdraft account.
How to repay that loan against FD? In most cases, such loans against bank FD is in the form of OD. So, you end up paying interest only on the amount withdrawn from your limit. “Borrowers can withdraw up to the sanctioned amount from the overdraft account and repay it as per his repayment capacity.
Step 1: Visit the Andhra Bank branch and obtain a premature withdrawal application form. Step 2: Fill up the form with the required details such as your bank account details, FD number, name, etc. Step 3: Submit the form.
The interest rate on fixed deposit is usually calculated using two methods – simple interest and compound interest. Simple Interest: This is a pre-fixed rate of interest at a fixed period of time. It is calculated by multiplying the rate of interest per annum, the principal amount, and the tenure in years.
To know the time duration in which your FD amount will get doubled, you have to divide 72 with the highest rate. For example, if the highest rate on FD is 6.95%, then the number of years in which your FD will get doubled is 72/6.95= 10.36. Thus, it will take 10 years for your FD to get doubled.
So, an OD against FD can be used as a regular liquidity instrument to meet a short-term requirement. Another advantage of the overdraft is that you don’t need to worry about monthly EMI obligations. You get the flexibility to deposit the outstanding amount at your convenience.
An overdraft is a loan provided by a bank that allows a customer to pay for bills and other expenses when the account reaches zero. For a fee, the bank provides a loan to the client in the event of an unexpected charge or insufficient account balance.
Top Banks Offering Loan Against Fixed Deposit
|Name of the Bank||Interest Rate||Loan Amount|
|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|
Axis Bank offers the highest FD interest rate of 5.75% p.a. which is for a tenure of 5 years and above for the general public. For senior citizens, the interest rate is up to 6.50%. The second highest interest rate is 5.50% p.a. which is offered by ICICI Bank and HDFC Bank for a tenure of 5 years and above.
All the fixed deposit holders, including individual holders or those with joint accounts, can apply for a loan against FD. FD, in the name of a minor, does not qualify for a loan against fixed deposits. Investors of 5-year tax-saving FD cannot apply for this type of loan.