In times of difficulty, Axis Bank Fixed Deposit customers have an option to not abandon their fixed deposit investment: they can take a loan against it. All holders of bank fixed deposits have access to this option, which allows them to continue receiving interest on their FDs and satisfy their cash demands without having to liquidate them.
What is a Loan Against FD Axis Bank?
The opportunity to borrow against a fixed deposit account is available to investors. Depositors can use this option to borrow up to a certain proportion of their deposits (85 per cent in Axis Bank).
The depositor’s initial investment, or the main amount, is represented by this sum. The accompanying FD certificate is kept with the Bank for the duration that the loan balance is outstanding. In the case of default on the loan, the Bank retains the right to demand repayment from the FD.
However, until the FD account matures, interest will continue to be earned on it as long as the return is made on time.
Eligibility Criteria For Applying For Axis Bank Loan Against Fixed Deposit:
The customer must meet the following requirements in order to be eligible to apply for a loan against an Axis Bank fixed deposit:
- Must be an Indian citizen
- Customers having active Axis Bank FDs can utilize the bank’s ODFD feature.
Key Features Of Loan against Axis Bank Fixed Deposit
The following are the primary features of an Axis Bank loan against a fixed deposit:
| Type of Loan | Overdraft |
| Loan/overdraft amount | Minimum – Rs. 25,000
Maximum – No ceiling |
| Interest Rate | 2% for loan up to 1 crore
3% for loan above 1 crore 4% for third party customers irrespective of amount |
| Deposit Period | Minimum: 3 months |
| Premature withdrawal | Allowed |
| Facility for Nomination | Available |
Difference Between A Personal Loan And An Overdraft Against FD
- OD against Fixed Deposit is a great way for those without credit histories to receive money. Without a credit history or credit score, borrowers can have trouble getting a personal loan.
- The application and paperwork process is significantly simpler than for a personal loan.
- The EMI system does not exist in ODs. As long as the FD is active, borrowers may make payments anytime they choose.
- As stated before, interest is solely assessed based on how much OD was consumed and for how long.
- OD facilities do not have prepayment fees, in contrast to personal loans.
Benefits Of Loan Against Axis Bank FD
- Get a loan amount up to 85% of the fixed deposit’s value. Rs. 25,000 is the minimum loan amount.
- Instead of withdrawing your FD in an emergency, you can take out a loan on it. Your FD withdrawal will result in a penalty fee.
- The amount used and the length of time it was used will determine whether the interest is charged.
- The overdraft facility is offered for at least three months.
- There is no processing cost for loans.
- There is no cost for early repayment of the loan.
- When you don’t have a credit history, this is a highly beneficial form of credit.
- The approval and payout procedure is quick, simple, hassle-free, and flawless when compared to other loans.
Axis Bank FD Interest Rates 2022
| Tenure | Regular Citizens | Senior Citizens |
| 7 days to 14 days | 3.50% | 3.50% |
| 15 days to 29 days | 3.50% | 3.50% |
| 30 days to 45 days | 3.50% | 3.50% |
| 46 days to 60 days | 4.00% | 4.00% |
| 61 days to less than 3 months | 4.50% | 4.50% |
| 3 months to less than 4 months | 4.50% | 4.50% |
| 4 months to less than 5 months | 4.50% | 4.50% |
| 5 months to less than 6 months | 4.50% | 4.50% |
| 6 months to less than 7 months | 5.25% | 5.50% |
| 7 months to less than 8 months | 5.25% | 5.50% |
| 8 months to less than 9 months | 5.25% | 5.50% |
| 9 months to less than 10 months | 5.50% | 5.75% |
| 10 months to less than 11 months | 5.50% | 5.75% |
| 11 months to less than 11 months 25 days | 5.50% | 5.75% |
| 11 months 25 days to less than 1 year | 5.50% | 5.75% |
| 1 year to less than 1 year 5 days | 6.25% | 7.00% |
| 1 year 5 days to less than 1 year 11 days | 6.25% | 7.00% |
| 1 year 11 days to less than 1 year 25 days | 6.25% | 7.00% |
| 1 year 25 days to less than 13 months | 6.25% | 7.00% |
| 13 months to less than 14 months | 6.25% | 7.00% |
| 14 months to less than 15 months | 6.25% | 7.00% |
| 15 months to less than 16 months | 6.40% | 7.15% |
| 16 months to less than 17 months | 6.40% | 7.15% |
| 17 months to less than 18 months | 6.40% | 7.15% |
| 18 months to less than 2 years | 6.50% | 7.25% |
| 2 years to less than 30 months | 6.50% | 7.25% |
| 30 months to less than 3 years | 6.50% | 7.25% |
| 3 years to less than 5 years | 6.50% | 7.25% |
| 5 years to 10 years | 6.50% | 7.25% |
How To Apply For A Loan Against FD
- Online
Below is a description of the process for applying for a loan against fixed deposit amount that is currently in the Axis Bank FD account:
- Visit /retail/loans/loan-against-fixed-deposit/ on the axis bank website.
- Then click “Apply Now.”
- You can log in using your mobile number, birth date, and PAN on the next page.
- To log in, you can also use your debit card information or online banking credentials.
- Once the necessary information has been input, in the event that you used the mobile number, date of birth, and PAN, click on “Send OTP.”
- Activate the OTP.
- To apply for a loan, follow the instructions on the following page.
- Offline
- Customers must fill out an application form at the local Axis bank location in order to use the service. The bank will then carry through its processes, and the branch executive will be able to provide you with specific information if you have any queries.
- Following a thorough review and in conformity with the bank’s current guidelines and credit policy, the loan will be approved. Margin and security do not replace due diligence, and neither will their existence.
- The branch needs to raise SR. The OD account in I-leverage should be created by the central team. The central staff creates an account for the user after validating all the details.
- Upon full loan repayment, the bank will release any securities it has in its possession. You, the borrower, will also be made aware of any unpaid claims and the legal documents allowing the bank to retain the security until the relevant claim is paid or settled if the bank chooses to maintain it.
Loan Against Axis Bank Fixed Deposit Interest Rates
- The interest rates on the bank’s loan against fixed deposits are competitive. The interest rates applied to various loan amounts are listed below:
- A 2% interest premium over the rate on term deposits is applied to loans up to Rs. 1 crore. For loans worth more than Rs. 1 crore, an interest rate of 3% is added to the term deposit rate.
- Regardless of the loan amount, 4% interest is charged to third-party consumers.
- Aside from the interest rate, there are no additional fees associated with the overdraft account. The interest rates that the bank charges on loans secured by fixed deposits are subject to alter at any time.
Terms And Conditions For Loan Against FD Axis Bank
- The interest that was deducted from the account is a demand in and of itself. Within seven days following the interest deduction, it must be paid back. The bank has the power to debit your SB account if you don’t pay back the interest. As an alternative, the bank may liquidate the FD tethered to the account to cover the unpaid balance.
- However, the loan or drawl account would be classified as a Non-Performing Asset (“NPA”) if the borrower fails to make payment of the aforementioned defaulted amounts, as well as the punitive interest and additional fees imposed by the bank, within 90 days of the due date.
- The Borrower shall [immediately] pay all of the foregoing sums in default, including with punitive interest and other costs, if any, in order to restore the aforesaid loan or drawl account to good standing.
- Only the reason for which a loan was granted may be used by borrowers. Without the Bank’s consent, they are not permitted to make any significant transfers from such money to the members of their organisation.
Apart from Loan Against Fixed Deposit, you can offer credit card against FD.Many bank offer this option.
Conclusion:
Managing unforeseen demands is a crucial aspect of personal finance, just as making plans for your stated financial goals. It is crucial to managing financial needs since unforeseen circumstances and crises seldom strike.
It will be far wiser to take out an overdraft on a bank FD or another asset during a financial emergency rather than sell or liquidate investments that were created over time with hard-earned money to achieve certain financial goals.
As a result, cautious borrowing within your means and prompt repayment will improve your creditworthiness and long-term financial well-being.
Loan Against FD – FAQs
-
Can I Take A Loan Against My Fixed Deposit?
Yes, Axis Bank also accepts loan requests from consumers of other companies. No matter how much is borrowed, there will always be an interest rate of about 4%.
-
Can I Transfer The Loan Amount Materially?
Only the intended use of borrowed cash can be utilized by borrowers. Furthermore, they are prohibited from making any sizable transfers from such money to their group companies without the Bank’s consent.
-
What Is The Largest Loan Amount That May Be Obtained Under The Loan Against The Fixed Deposit Scheme At Axis Bank?
The maximum amount that may be borrowed is unrestricted. However, if the loan amount is less than Rs. 25,000, the bank would not allow it.
-
Will Axis Bank Permit A Premature Withdrawal In The Event Of A Medical Or Financial Emergency?
Yes. If the customer does not have any overdrafts on the account, the banks permit early withdrawal of fixed deposits.
-
Will The Bank Impose Any Penalties Or Fees If I Wish To Terminate My Fixed Deposit Before The Term Is Up?
No. When an account is closed early, the bank does not impose any fees.
-
Which Is Preferable, A Personal Loan Or An Overdraft Against FD?
In comparison to a personal loan, an overdraft facility against a fixed deposit is a superior choice for financing a financial emergency. A personal loan carries a higher interest rate and calls for an EMI system and a credit score. An overdraft or loan secured by an FD suggests a cheaper interest rate, a simple loan application, and no additional loan fees.
-
How Can I Apply Offline For An Axis Bank Loan Against FD?
To use the service, customers simply fill out an application at their nearby Axis bank store. The Bank will then proceed with its procedures, and the branch executive will be able to provide you with more details if you need them.
have any inquiries.
-
Which Papers Will The Bank Require?
The following documents are needed to apply for an Axis Bank loan against a fixed deposit:
- A properly completed application
- Properly executed agreement
- Discharged term deposit receipts in favour of Axis Bank
-
What happens if I can’t pay the EMIs on the loan against FD?
If you don’t pay your EMIs, the bank will use the balance in your FD for the same.
Interested in how we think about the markets?
Read more: Zen And The Art Of Investing
Check out all our “Investor Education Originals” videos on Youtube and get smart about investing.
Start investing through a platform that brings goal planning and investing to your fingertips. Visit kuvera.in to discover Direct Plans and Fixed Deposits and start investing today.
#MutualFundSahiHai #KuveraSabseSahiHai #PersonalFinance #InvestorEducation;
