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Loan Against Fixed Deposit

When you are in urgent need of money, one of the first things that come to mind is to break your Fixed Deposit (FD). However, that option is not at all worthwhile. Instead, availing a loan against your FD without breaking it saves both your time and money.

Loan against an FD is a feature most of the leading banks of India provide when you invest in their fixed deposit scheme. Borrowing a loan against your FD is a good option, for you need not break your FD before its maturity and you are eligible for a loan at a much lower interest rate.

Benefits of Taking a Loan Against Your Fixed Deposit


  • You do not loose on the interest or pay a penalty for liquidating your FD before maturity.
  • You are eligible for a loan at a much lower interest rate as compared to a personal loan.

PNB’s Loan Against Fixed Deposit

Punjab National Bank is among the Big Four Banks of India and the third largest in the country in terms of its assets. PNB offers short-term and long-term fixed deposit schemes at competitive interest rates with auto-renewal facilities.

Features of PNB’s Loan Against Fixed Deposit

  • PNB allows overdrafts/loans against term deposits but the bank does not allow a loan against Certificates of Deposit (CD).
  • Loans and Advances can be availed against the deposits lying to the credit of the borrowers and/or third parties.
  • The loan can be extended at any branch of PNB, after getting the lien noted and signature verified.
  • You can avail a loan against your FD up to 90% of the deposit amount.
  • Such loans are offered under interest rates directed by Reserve Bank of India which is subject to change from time to time or at rates prescribed by the bank.
  • For an advance against term deposits where TDS is applicable, the total tax deductible u/s 194A of Income Tax on interest of such term deposits is also to be reduced from the amount of advance/DP/limit.

In case there is any decrease in the minimum margin of the FD after granting the loan, then the bank has the right to call upon the customer to meet up for the shortfall. Also, if you are unable to repay the outstanding amount then at any point of time the bank can liquidate your fixed deposit to make up for the loss.

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