Loan Against FD Interest Rates 2026 – Bank-Wise Comparison
Compare the best loan against FD interest rate options and get quick, low-cost funds with flexible limits and easy approval from top banks.
Anjali Singh
Assistant Manager
A loan against FD allows you to access funds often at a lower interest rate and with better terms than unsecured loans like personal loans. The approval comes more easily as the FD pledging adds a safety net for the lenders. Typically, the loan against FD interest rate is decided based on the FD interest rate itself.
Here, we are going to explore the top loan against fixed deposit interest rate offered by different banks and the factors influencing the interest rate.
What is a Loan Against Fixed Deposit?
A loan against FD is a secured loan, meaning your FD acts as the security. Because the bank is holding your money as security, the risk is low for them. That’s why this loan comes with:
- Lower interest rates
- Quick approval
- Minimal paperwork
Most banks allow you to borrow 70% to 90% of your FD amount. You also keep earning interest on your FD while repaying the loan.
Benefits of a Loan Against Fixed Deposit
Here are the main reasons why many people prefer a loan against FD:
- Low Interest Rates: Banks normally charge up to 3% above your FD rate, which is much cheaper than personal loans.
- Flexible Loan Amount: The loan offered can be anywhere between 70% to 90% of the FD value. You can borrow as you need.
- Fast Processing: Since the FD is used for pledging, loan evaluation, and processing becomes faster.
- FD Stays Safe: You don’t have to close your FD, so your savings stay intact and continue growing.
- Quick Access to Funds: Compared to the lengthy processes of unsecured loans, a loan against FD can provide quicker assistance during emergencies.
Factors Affecting the Loan Against FD Interest Rate
Banks generally offer a loan against FD interest rate that is up to 3% or more than the FD interest rate. That said, the following factors can impact the rates:
- FD Interest Rate: Since the FD rate directly helps decide the interest rate for the loan against FD, the higher the FD rates, the higher the loan rates.
- FD Tenure: If the maturity period has little time left, the rates tend to go high.
- Customer Relationship: Long-standing relationship, holding salary accounts, running multiple accounts (savings, credits, and so on) with the lender bank can help negotiate a better secured loan FD rate.
- Banks’ Internal Policies: Internal policies, market competition, and operational costs of the banks can have an impact on the rates offered.
Bank-Wise Loan Against FD Rates 2026 for Easy Comparison
Here is an easy comparison of bank wise loan against FD rates:
|
Name of Bank |
Interest Rate Charged (in % p.a., higher than normal FD rates) |
Limit for % of Loan Against FD Amount |
|
Axis Bank |
2% p.a. higher |
85% |
|
HDFC Bank |
2% p.a. higher |
90% |
|
State Bank of India (SBI) |
1% p.a. higher |
95% |
|
Yes Bank |
1% p.a. higher |
90% |
|
Bank of Baroda |
1% p.a. higher |
90% |
|
Punjab National Bank (PNB) |
0.75% p.a. higher |
90% |
|
Union Bank |
2 - 3% p.a. higher |
75% |
Disclaimer: Actual rates may vary by bank and customer profile.
Tips for Choosing the Best Bank for Fixed Deposit
- Compare interest rates from multiple banks.
- Check the maximum loan-to-value (LTV) percentage.
- Ask if the bank offers an overdraft facility.
- Try to negotiate if you are an existing customer.
- Repay early if possible to reduce interest costs.
Conclusion
The loan against FD interest rate depends on the interest rate of the FD as well as the lender bank’s policy. A high-value FD and the availability of extended tenure, which depends on the remaining maturity of the FD, also help determine the rates.
Check out the latest bank wise loan against FD rates and apply with My Mudra for a hassle-free application process and quick disbursal.
Also Read:
- Loan Against FD: Meaning, Benefits & Interest Rates 2026
- How to Apply for a Loan Against FD Online – Step-by-Step Guide
Frequently Asked Questions
What is a loan against FD?
A loan against FD is a secured loan where you borrow money by using your fixed deposit as collateral. Your FD remains active and continues to earn interest while you repay the loan.
How much loan can I get against my FD?
Most banks allow you to borrow 70% to 90% of your FD amount. Some banks may offer a little more or less depending on the FD type and tenure.
What is the interest rate for a loan against FD?
Banks usually charge up to 3% above your FD interest rate.
Is a loan against FD cheaper than a personal loan?
Loans against FD are offered at significantly lower interest rates than personal loans. This is because the FD provides security and reduces the risk for the lender. This often makes the overall borrowing cost for a loan against FD lower than a personal loan.
Do I lose interest on my FD if I take this loan?
No. Your FD continues to earn interest normally. You only pay interest on the loan amount.
What is the difference between a loan against FD and an FD overdraft?
A loan gives you a lump sum amount. An overdraft gives you a credit limit linked to your FD, and you pay interest only on the portion you use. Much like the rate for the loan, the FD overdraft rate is decided based on the FD rate.
What happens if I don’t repay the loan?
If you fail to repay, the bank can recover the amount directly from your fixed deposit. This is why the loan is considered low-risk for lenders.
Anjali Singh
Assistant Manager
Hey there, I'm Anjali Singh. With over 6 years of experience in finance, I specialize in creating content on banking, loans, and financial planning. My goal is to simplify complex financial topics and help readers make informed decisions through my articles.
