Since the Kovid epidemic that started last year, many people have gone through financial difficulties, in which case you can take a loan in lieu of FD.
Since Kovid-19 started spreading in the country last year, the common people in the country have had to face great financial difficulties. Due to the lockdown imposed in March last year, a large number of people have either lost their jobs or have to face salary cuts.
In such a situation, many people have to face financial crisis. But, if you are facing a similar problem, then you can use Fixed Deposit (FD) to deal with this difficulty. Actually, you can take a loan on your Fixed Deposit.
Here, we are telling you how loans on FD can prove to be helpful for you in times of shortage of cash.
What is a loan on FD?
A loan on a fixed deposit is a type of secured loan. In this, investors can pledge their Fixed Deposit as security. In return, the bank gives them a loan. The loan amount depends on the FD amount.
This loan can be up to 90-95 percent of your FD amount. That is, if your FD is 1 lakh rupees, then you can get a loan from 90 to 95,000 rupees in return.
Who can apply for a loan on FD?
Everyone holding Fixed Deposit (FD) in the bank can get a loan instead. If there is an FD in the name of a minor, then you cannot take a loan on it. Apart from this, a loan cannot be taken even on 5-year tax-saving FD.
HDFC Bank gives a loan of at least 2 lakh rupees in exchange for securities. The bank is also giving loans on securities such as shares, mutual funds, life insurance policies, National Savings Certificate (NSC), Gold Deposit Certificate (GDC), Kisan Vikas Patra.
ICICI Bank is also providing loan facility on FD. In this, the bank is giving loans up to 90 percent on fixed deposits.
Apart from this, the country’s largest bank State Bank of India (SBI) is providing online facility for this facility.
How much interest do banks charge?
If you take a loan on FD, then you have to pay 1-2% more than the interest you get on a fixed deposit.
