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Guide

Loan Against Fixed Deposit

This is very often the cheapest credit a salaried Indian can access, and almost nobody knows it exists.

Typical rate on a loan against FD
FD rate + 1 – 2%

Against 11–24% on an unsecured personal loan.

as of 2026-08-15· Bank tariff schedulesreported

The rate is your deposit rate plus a small spread — commonly one to two percentage points — with no credit check, no income proof and no processing to speak of, because the bank already holds the money.

By Nishit Kumar, Founder & Editor
Updated 17 August 2026

What to know

Compare it against the instinct to break the deposit. Premature withdrawal usually costs a penalty and, worse, the deposit is recomputed at the rate applicable for the period it actually ran — so a five-year FD broken at year two earns the two-year rate, retrospectively. Borrowing against it at a small spread for a few months is frequently cheaper than losing that rate differential permanently.

It is typically offered as an overdraft against up to 90–95% of the deposit value, with interest charged only on what you draw. That makes it an excellent standby facility: set it up against an existing deposit and leave it undrawn, so the emergency line is already in place before the emergency.

Your numbers

₹50 L
₹10,000₹50,00,000₹20 Cr
18.5%36
120 years30
Monthly EMI
₹43,391
  • Principal48%
  • Interest52%
Principal
₹50,00,000
Total interest
₹54,13,879
Total payable
₹1,04,13,879
Interest as % of principal
108.28%
Growth over time
₹0₹27.3 L₹54.7 L₹82 L₹1.09 CrYr 1Yr 4Yr 7Yr 10Yr 13Yr 16Yr 19Yr 20
ValueAmount you put in

What this means.Over 20 years you repay more in interest than you borrowed. Cutting the tenure or prepaying early changes this sharply.

View the full breakdown (20 rows) →
YearPrincipal paidInterest paidBalance
1₹99,511₹4,21,182₹49,00,489
2₹1,08,307₹4,12,387₹47,92,181
3₹1,17,881₹4,02,813₹46,74,300
4₹1,28,300₹3,92,394₹45,46,000
5₹1,39,641₹3,81,053₹44,06,359
6₹1,51,984₹3,68,710₹42,54,375
7₹1,65,418₹3,55,276₹40,88,957
8₹1,80,039₹3,40,655₹39,08,918
9₹1,95,953₹3,24,741₹37,12,965
10₹2,13,274₹3,07,420₹34,99,691
11₹2,32,125₹2,88,569₹32,67,566
12₹2,52,643₹2,68,051₹30,14,923
13₹2,74,974₹2,45,720₹27,39,949
14₹2,99,279₹2,21,415₹24,40,670
15₹3,25,733₹1,94,961₹21,14,937
16₹3,54,525₹1,66,169₹17,60,412
17₹3,85,862₹1,34,832₹13,74,550
18₹4,19,968₹1,00,726₹9,54,582
19₹4,57,090₹63,604₹4,97,492
20₹4,97,492₹23,202₹0

At ₹50,00,000 over 20 years, Bank of Baroda holds the lowest advertised floor on our board.

Only these figures travel with you.

See Bank of Baroda’s terms

Questions

Is a loan against FD better than breaking the FD?

Usually, for a short need. Breaking the deposit costs a penalty and recomputes your interest at the rate for the shorter period actually run, permanently. Borrowing at your FD rate plus one to two percent for a few months is often the cheaper outcome.

How much can I borrow against a fixed deposit?

Commonly up to 90–95% of the deposit value, as an overdraft with interest charged only on the amount drawn.

Does a loan against FD need a credit check?

Generally not — the deposit is the security, so the bank is not taking credit risk. That also makes it one of the few routes to credit for someone with no credit history at all.

Related reading

Sources

Every figure on this page is traced to the document it came from. Where a claim rests on a regulator or an institution’s own rate card, that is the link below — not a summary of it.

  1. [3]Home, personal, vehicle and education loan rate cards — August 2026— Lender published rate cardsas of 15 August 2026
Worth knowing.Rates, fees and terms change frequently and vary by applicant. Everything here is general information, not personalised advice. Confirm the current terms directly with the institution before you apply. How we research and rate.