How Can I Get a Loan Against My Fixed Deposit

Know how to get a loan against your fixed deposit. Check eligibility, interest rates, and steps to apply for FD loan online with ease.
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5 min read
07-October-2025

A Fixed Deposit (FD) is a low-risk investment option where you can park your funds for a fixed tenure and earn guaranteed returns at a predetermined interest rate. On maturity, you receive both the principal and the accrued interest, based on whether you have chosen a cumulative or non-cumulative FD. However, in times of financial urgency, breaking your FD is not the only option. You can opt for a loan against FD, which lets you use your deposit as collateral to access quick funds at a relatively low interest rate. This way, you retain your investment while meeting your immediate cash requirements conveniently and without disturbing your long-term savings.

What is a loan against fixed deposit?

A loan against fixed deposit (FD) is a secured borrowing option that allows you to pledge your fixed deposit as collateral and access funds without breaking it. Since the FD acts as security, lenders offer this loan at an interest rate slightly higher than the FD rate. The loan amount usually up to 75% of your deposit value, depending on the FD type and tenure. This makes it a convenient way to meet urgent financial needs while your deposit continues to earn interest.

Eligibility to get loan against FD

To apply for a loan against FD, you need to meet basic eligibility requirements. These may slightly differ across financial institutions, but generally include the following:

  • The applicant should be the primary holder of the fixed deposit.
  • Joint FD holders can apply with the consent of all account holders.
  • The FD must have completed the minimum lock-in period (usually 3 months).
  • The FD should not be in the name of a minor or held under tax-saving (5-year lock-in) schemes.
  • The loan can be availed only against deposits held with the same institution.

Step-by-step guide on applying for a loan against an FD

Getting a loan against fixed deposit (FD) is simple and convenient. Most financial institutions offer an easy online or offline process to help you access funds without breaking your FD. Here is how it works:

Step 1: Log in to your FD account

Visit your financial institution’s website or branch and log in to your FD account using your registered credentials.

Step 2: Select the loan against FD option

Navigate to the ‘Loan against FD’ or ‘Overdraft against FD’ section and select the deposit you wish to pledge as collateral.

Step 3: Choose the loan amount and tenure

Enter the required loan amount usually up to 75% of your FD value and select the preferred repayment tenure, which typically lasts until the FD maturity date.

Step 4: Review interest rate and terms

Check the applicable interest rate (generally up to 2% higher than your FD rate) along with the terms and conditions before proceeding.

Step 5: Submit your request

Complete the online form or submit your application at the branch. Once approved, the loan amount is quickly disbursed to your linked bank account.

This process helps you meet urgent cash requirements efficiently while keeping your FD investment intact and earning interest.

Loan Against Shares
Loan Against Mutual Funds

Documents required for loan against FD

The documentation process for a loan against fixed deposit (FD) is simple since your deposit already acts as collateral. Most institutions require only basic identification and account-related documents to verify your eligibility. Here’s a list of commonly required documents:

  • Application form: A duly filled loan against FD application form.
  • Identity proof: PAN card, Aadhaar card, passport, or voter ID.
  • Address proof: Utility bills, Aadhaar card, passport, or driving licence.
  • Fixed Deposit receipt: The original or digital copy of the FD certificate or statement.
  • Photographs: Recent passport-size photographs (if requested).
  • Signature verification proof: As per the bank or NBFC’s requirement.

These minimal documents make the loan approval process quick and hassle-free, enabling you to access funds in no time while your FD continues to earn returns.

Pros and Cons of Loans Against Fixed Deposits

Pros

  • Quick disbursement: Loans are often disbursed quickly, sometimes even on the same day.
  • Lower interest rates: Compared to unsecured loans, interest rates on loans against fixed deposits are generally lower.
  • No prepayment penalties: You can repay the loan early without any additional charges.
  • Tax benefits: Interest paid on the loan might be tax-deductible in certain cases.
  • Maintain ownership: You retain ownership of the fixed deposit even while it is pledged as collateral.

Cons

  • Limited loan amount: The loan amount is typically a percentage of the fixed deposit value, limiting the amount you can borrow.
  • Fixed deposit maturity: If you take a loan against your fixed deposit, you may lose the benefit of higher interest rates that might be available for longer tenures.
  • Risk of default: If you fail to repay the loan, the lender may liquidate your fixed deposit to recover the outstanding amount.
  • Reduced liquidity: While you can still access the funds through a loan, it reduces the liquidity of your fixed deposit.

You’ll receive the funds within 24 business hours of application. In case there’s a joint account holder for your FD, they’ll also receive an OTP for verification during the application process.

You can also download our app from Play Store/ App Store and apply for a loan against FD on the go using online Bajaj Finance services.

Sign-in

Conclusion

A loan against fixed deposit (FD) is a practical and reliable solution for those who need quick access to funds without disturbing their long-term savings. It offers the dual benefit of continued interest earnings on your deposit and immediate liquidity at comparatively low interest rates. Since the loan is secured by your FD, the approval process is quick, documentation is minimal, and repayment terms are flexible. Whether you are facing a temporary cash crunch or planning a major expense, opting for a loan against FD can help you bridge the gap efficiently. It’s a smart financial move that ensures your investments stay intact while you take care of your immediate financial needs.

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Frequently asked questions

Is overdraft against FD a good option?

An overdraft against an FD can be a convenient option for short-term liquidity needs. However, it's important to be aware of the interest rates and any associated charges. Consider other options like personal loans or credit cards if you need a more flexible borrowing solution.

Can I get a loan against an FD in the post office?

Yes, many post offices offer loans against fixed deposits. The interest rates, loan amount, and tenure can vary depending on the post office and the type of FD. It's advisable to check with your local post office for specific details and eligibility criteria.

What is the maximum loan I can take against FD?

You can usually get a loan of up to 75% of your fixed deposit value, depending on the type of FD, tenure, and the lending institution’s policies.

What is the interest rate for a loan against FD?

The interest rate for a loan against FD is generally up to 2% higher than the interest rate offered on your fixed deposit, making it more affordable compared to unsecured personal loans.

Is taking a loan against FD better than breaking the FD?

Yes, taking a loan against FD is a smarter choice than breaking it. You retain your investment, continue earning interest, and get quick access to funds without paying premature withdrawal penalties.

Can senior citizens get higher loan amounts against FD?

Senior citizens usually receive the same loan-to-value (LTV) ratio as regular investors, typically up to 75% of the FD value. However, they may benefit from higher FD interest rates, reducing the effective loan cost.

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