Indian banks are here to offer you with a financial product, named as fixed deposit. It helps you to earn a higher interest rate on savings when compared to other saving services for health care, educational expenses and more. This kind of savings account helps you to pay a fixed interest rate on saving for investing that particular amount for a stipulated time frame. The amount and the deciding factor will be the bank.
As understood from the term “fixed deposit,” the deposits are made for a fixed tenure. Before that, you are not allowed to withdraw money. You cannot do that otherwise you might lose your entire maturity. However, with the help of advanced bank notification and after paying a penalty fee, you can withdraw fixed deposit. You have the right to deposit in FD for multiple tenures and from various banks, depending on your needs.
Loan against NRI FDs:
Some of the Indian private banks can provide loan against the fixed deposits to some of the NRIs or non-residential individuals. NRIs have the right to invest in the NRI fixed deposits through NRO, NRE and even FCNR account. They have the right to procure demand loan or an overdraft, which is placed in fixed deposit accounts.
There are some banks in India, which might offer their customers with a loan against fixed deposit to up to 90% of the deposited value in the NRE FD accounts. Other banks can offer a loan amount of around 85% of the NRE fixed deposit account. Loans against such NRI account can be availed in foreign currency or Indian rupees, as per client’s requirements and needs.
Loan against your domestic FDs:
Just like loans against NRI accounts, banks can provide you with loans against domestic fixed deposit accounts, as well. This step helps you to fulfil the financial requirements by offering funds up to 90% of the current FD value. These loans against FD are mostly granted as overdrafts against deposits or demand loans. Most of the top-ranking Indian banks can provide loans to the people against their FD amounts. The exact amount of loan is hard to determine, as it is subject to change from one bank to another.
Benefits you cannot deny:
Even though people have ways to get their loans approved, still they wish to use FD as bait. Now, you might want to know why. This helps in liquidity management, as the most sought-out reason.
• Loan taken against any form of FD account can be your perfect way to procure short-term money for any form of financial requirements.
• You can do that without breaking our FD account.
• Moreover, you don’t have to provide banks anything as collateral security as they have your FD account under their control.
• So, if you fail to return the loan amount with interest right on time, they might have to take away the FD account from your side.
There are so many other options available and benefits involved with loans against FD accounts. Get to know about each point before jumping into results.