{"id":12730,"date":"2025-08-06T17:35:57","date_gmt":"2025-08-06T12:05:57","guid":{"rendered":"https:\/\/www.torusdigital.com\/toruscope\/?p=12730"},"modified":"2025-08-20T12:35:59","modified_gmt":"2025-08-20T07:05:59","slug":"what-is-overdraft-against-fixed-deposit","status":"publish","type":"post","link":"https:\/\/www.torusdigital.com\/toruscope\/banking\/what-is-overdraft-against-fixed-deposit\/","title":{"rendered":"What is Overdraft Against Fixed Deposit?"},"content":{"rendered":"

When you need urgent funds but don\u2019t want to break your fixed deposit (FD), there’s a smart solution: Overdraft against Fixed Deposit. Instead of liquidating your investment, you can borrow funds against it. This option provides quick access to funds without compromising the interest your FD continues to generate.<\/span><\/p>\n

In this article, we explore what is overdraft against fd, overdraft against FD meaning, overdraft against fd example, how the process works, eligibility, its benefits, and what to consider before choosing this route.\u00a0<\/span><\/p>\n

<\/span>How Does Overdraft Against FD Work?<\/b><\/span><\/h2>\n

Here\u2019s how the overdraft facility against your fixed deposit works:<\/span><\/p>\n

    \n
  1. You approach your bank where your fixed deposit is held.<\/span><\/li>\n
  2. The bank sets an overdraft limit, generally 75% to 90% of your FD value.<\/span><\/li>\n
  3. Once approved, the amount is credited to your savings account or linked OD facility account.<\/span><\/li>\n
  4. Interest is charged only on the amount you actually use, not the full limit sanctioned.<\/span><\/li>\n
  5. You can withdraw funds any time within the tenure of the FD.<\/span><\/li>\n
  6. You repay the amount as per your convenience\u2014monthly or lump sum\u2014without any prepayment penalty in most cases.<\/span><\/li>\n<\/ol>\n

    This arrangement ensures that you continue to earn on your fixed deposit<\/a><\/strong>, even as you benefit from instant liquidity.<\/span><\/p>\n

    For example, if you have a \u20b92 lakh fixed deposit FD, and the bank offers a 90% overdraft facility, you may get an overdraft amount of \u20b91.8 lakh. If you withdraw \u20b950,000, interest is charged only on that amount.<\/span><\/p>\n

    This form of financing is available with several financial institutions that offer competitive fixed deposit interest rates<\/a><\/strong>. Platforms like Torus Digital provide a seamless digital experience for opening and managing FDs.<\/span><\/p>\n

    <\/span>Eligibility for an Overdraft Against FD<\/b><\/span><\/h2>\n

    Most banks have straightforward eligibility requirements for this facility:<\/span><\/p>\n