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Ananya Shrivastava
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Yes, you can get a personal loan against your fixed deposit, typically up to 90% of its value, without breaking the FD itself. SBI confirms it offers a dedicated personal loan (Demand Loan) against Time Deposits, and Canara Bank offers a similar single-disbursal personal loan called Canara My Money.
If you are holding a fixed deposit and face a sudden cash need, borrowing against that FD makes more sense than breaking it early. This guide is for FD holders across India who want a clear picture of how a personal loan against fixed deposit actually works, how much you can borrow, and how the interest rate compares to a regular personal loan.
Yes, several Indian banks let you take a personal loan against your fixed deposit, using the FD itself as collateral without having to break or prematurely close it.
According to SBI, this facility is available as a genuine Demand Loan, disbursed as a lump sum, letting you access funds for urgent needs while your deposit continues earning interest throughout the loan tenure.
Since the FD serves as security, lenders view this as a genuinely low-risk facility, which is why it comes with easier eligibility and quicker processing than an unsecured personal loan.
You can typically borrow up to 90% of your fixed deposit's value, though the exact limit and minimum amount vary by bank and by product type.
SBI: Personal loan up to 90% of the value of your Time Deposit, available as a Demand Loan (full amount disbursed upfront) or as an Overdraft (draw as needed), with a maximum of ₹5 crore for the online overdraft route.
Canara Bank: Personal loan up to 75% of your online Term Deposit's value through Canara My Money, with a quantum of minimum ₹50,000 to maximum ₹10 lakh.
Since the amount you can access is directly tied to your FD's principal value, a larger fixed deposit naturally supports a larger loan, up to each bank's specific ceiling.
The interest rate on a loan against fixed deposit is set slightly above your FD's own interest rate, depending on the bank and product.
Here's how this compares:
SBI: Interest rate is 1% above the relevant Time Deposit rate, for both the Demand Loan and the Overdraft.
Canara Bank: My Money is disbursed at a margin of 25%, meaning you receive up to 75% of your deposit's value as the loan amount; the bank does not publish a flat percentage-over-FD-rate figure for this specific digital product on its official page.
This rate is calculated relative to your own FD rate rather than a fixed market rate, it ends up considerably lower than a standard unsecured personal loan, since the bank's risk is minimal with your own deposit backing the borrowing.
A Demand Loan against FD disburses the full sanctioned amount upfront in one go, with interest charged on the entire amount from day 1, while an Overdraft lets you withdraw funds as needed up to a sanctioned limit, paying interest only on what you actually use.
Here's what genuinely separates these 2 structures, using SBI's product terms:
Demand Loan: Full disbursement takes place at once, repayable over the remaining maturity period of the deposit or up to 120 months, whichever is earlier.
Overdraft: You draw funds as required, interest applies only to the amount withdrawn, and the facility can be renewed at bank branches after the existing term expires.
Canara Bank's My Money product follows the Demand Loan structure closely: it disburses the full sanctioned quantum with a bullet repayment due 1 day before the underlying deposit's maturity date, so you repay everything in one go rather than drawing down a revolving limit.
You need minimal documentation for a personal loan against a fixed deposit, since the FD itself serves as collateral, reducing the need for extensive income or identity verification compared to a regular loan.
SBI's Demand Loan and Overdraft against Time Deposit can be availed digitally through YONO or Internet Banking for single-name deposit holders, with the FD's own lien serving as security.
Canara Bank's My Money facility goes further, offering a complete end-to-end digital journey with no physical branch visit, using Aadhaar-linked OTP e-signing for documentation, and explicitly waiving co-obligation as security.
Since you're already an existing FD holder with the bank, much of your identity and account verification is already on file, considerably simplifying the process compared to applying for fresh unsecured credit.
Understanding how these 2 borrowing options differ helps you decide which genuinely suits your specific situation and cost sensitivity.
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A loan against FD comes out ahead on cost and paperwork in nearly every case, provided you're comfortable keeping your deposit locked as security until repayment.
Take an FD holder with a ₹5,00,000 SBI Time Deposit who needs ₹3,00,000 for a medical emergency.
The situation: Rather than breaking the FD and losing accumulated interest, they apply for a Demand Loan against it through YONO or Internet Banking.
Eligible amount: Since SBI confirms up to 90% of the Time Deposit's value is available, their ₹5,00,000 FD comfortably supports the ₹3,00,000 they need, working out to 60% of the deposit's value.
Interest rate applied: The Demand Loan is sanctioned at their Time Deposit rate plus 1%, considerably lower than a regular personal loan rate.
Amount actually disbursed: The full ₹3,00,000 is disbursed upfront as a lump sum, since a Demand Loan does not work like a revolving overdraft.
Impact on the FD itself: The original Time Deposit continues earning interest undisturbed throughout the loan tenure, up to the remaining maturity period or 120 months, whichever comes earlier.
Taking a personal loan using your fixed deposit as collateral is one of the most affordable ways to raise funds without breaking your fixed deposit. SBI offers up to 90% of your Time Deposit's value at just 1% above your FD rate, while Canara Bank's My Money facility offers up to 75% of your online Term Deposit at zero processing charges. Compare both banks' current terms directly on their official pages before applying, since minimum amounts and margins vary between products.
Yes, banks like SBI and Canara Bank offer a genuine personal loan against your FD, disbursed as a lump sum, without requiring you to break the deposit.
SBI's Demand Loan goes up to 90% of your Time Deposit's value. Canara Bank's My Money facility goes up to 75% of your online Term Deposit's value, capped at ₹10 lakh.
SBI charges just 1% above your Time Deposit's own interest rate, significantly lower than an unsecured personal loan.
A Demand Loan disburses the full sanctioned amount upfront with interest from day 1. An Overdraft lets you draw funds as needed, and charges interest only on what you withdraw.
No, documentation is minimal since your FD is already on file with the bank. Canara Bank's My Money facility can be completed entirely online with no branch visit.
The bank can adjust the outstanding dues against your FD's value, since the deposit already serves as security for the loan.
Yes, your fixed deposit keeps earning its own interest throughout the loan tenure, since it isn't broken or closed.
No, both SBI and Canara Bank charge zero processing fees for these facilities.
This varies by bank. SBI's online Demand Loan and Overdraft are currently restricted to single-name deposit holders, though joint holders can apply at SBI branches.
Yes, since breaking an FD early typically forfeits some interest, while a loan against it keeps your deposit intact and earning throughout.
