Don't Break Your Fixed Deposit — Here's a Smarter Way to Borrow

A fixed deposit is built on one premise — your money stays put and grows. But when a financial need comes up, the instinctive move is to break it early, losing out on interest and sometimes paying a penalty too.

A loan against fixed deposit offers a better way. You borrow against your FD while it continues to earn returns. Think of it as a hold on your FD, it stays invested; you just can't withdraw it until the loan is repaid.

How interest rates on a loan against FD work

Most loans look at your credit score, income, and repayment history to decide what rate you get. A loan against fixed deposit works differently because your FD itself is the collateral, and the loan against fixed deposit interest rate is already competitive by design.

● It is tied to your FD rate, not your credit profile — The loan comes at 2% p.a. over your FD rate. So if your FD earns 7%, your loan costs 9% — but your deposit keeps earning that 7%, making the real cost just 2% out of pocket.

● Your returns don't pause for your loan — Most secured loans require you to liquidate an asset to access funds. Here, your FD stays invested and keeps compounding — so you are borrowing without giving anything up.

● No surprise charges — With 100% transparent fees, zero foreclosure charges, and no hidden costs, the Bajaj Finserv Loan Against Fixed Deposit interest rate is exactly what it appears to be.

How much can you borrow

You can borrow up to 75% of your deposit value, with a minimum loan amount starting at Rs. 3,000 — making it accessible even for smaller deposits. *

*75% applicable for cumulative FDs; up to 60% for non-cumulative FDs.

Factors that influence the interest rate

A few variables shape the final rate on a loan against fixed deposit:

● FD interest rate: Since the loan rate is linked directly to your deposit rate, a higher-yielding FD means a slightly higher loan rate — but the spread remains the same.

● Type of FD: Cumulative and non-cumulative FDs may have slightly different applicable rates and loan limits.

● Tenure remaining: Lenders consider the remaining tenure of your FD when sanctioning the loan amount.

● Lender policies: Terms and structures may vary across financial institutions.

A quick way to evaluate if this works for you

Before opting for a loan against fixed deposit, run through a few simple checks:

✔      Compare the cost of breaking vs borrowing — Breaking your FD early means losing interest and paying a penalty. In most cases, a loan against FD works out cheaper. Example: Your FD earns 7% p.a. and the loan costs 9% p.a. — still cheaper than losing all the interest you've built up.

✔      Match the loan to your need —Whether it's a short cash gap or a planned expense over a few months, the Bajaj Finserv Loan Against FD offers a tenure up to 36 months, giving you enough runway without stretching unnecessarily. The longer you hold, the more interest adds up, so borrow for what you need and repay when you can.

✔      No EMI pressure — After availing the loan, you are not required to pay EMIs. The loan amount and interest can be repaid any time before the maturity date, and if unpaid, it is adjusted from the maturity proceeds of the FD.

✔      Be prepared for the lien — A lien is marked on your FD for the loan duration, it cannot be redeemed until repayment. Your deposit continues to earn interest through this period; the lien only restricts withdrawal, not returns.

How to apply for a Bajaj Finserv Loan Against FD

The process is straightforward and can be completed online:

Step 1: Visit the Bajaj Finserv Loan Against FD page and click 'Apply'

Step 2: Enter your mobile number and verify with an OTP

Step 3: You will be redirected to the customer portal — My Account

Step 4: Under “My Relations”, click on “View Details”

Step 5: Click on “Get a loan against FD” under “Quick Actions”

Step 6: Enter the loan amount and generate OTP

No documents are required for applying online. The loan can be availed after completion of 3 months from the date of deposit.

The bottom line

A loan against fixed deposit is one of the most cost-efficient ways to access funds in a pinch, without breaking an investment that is quietly doing its job.

The interest rate is transparent, the process is simple, and your FD keeps earning through it all. Used for the right need and the right duration, it is a borrowing option that costs you very little and disrupts even less.

*Terms and conditions apply