I have a few FD's locked in for a period of 2 years. However, I am not very liquid at this point and I need access to that money immediately. What are my options? Can I take a loan against my Fixed Deposit's or do I need to break them and lose out on the interest that I have earned for 1 year. Also, roughly how long would this procedure take?

2 Answers 2


You would need to check with Bank as it varies from Bank to Bank.

You can break the FD's. Generally you don't loose the interest you have earned for 1 years, however the rate of interest will be reduced. i.e. if the rate was 7% for 1 year FD and 8% for 2 years FD, when you break after a year you will get only 7%. Generally this can happen in few hours but definitely in 2 days.

You can get a Loan against FD's. Generally the rate of interest is 2% higher than FD rate. There is also initial processing fee, etc. Check with the Bank, it may take few days to set things up.


Yes, consider taking a loan against a fixed deposit. It’s not only abracadabra-easy; it’s also a smart choice. You just need to place the bank FD as collateral with the bank and avail a loan. The amount you get will be in the form of an overdraft (OD) against your bank FD.

Interest rates of loans against FD are usually 1-2 percent higher than contracted rates of FD placed as collateral. However, you will continue to earn interest on FDs used as collateral during the loan tenure. This means, you do not have to break your FD and it keeps earning interest as per the contracted rate.

The procedure varies from bank to bank so you may consider contacting your bank first.

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