One of the easiest and most economical ways to raise money is through fixed deposits. You would have two options for borrowing against your FD: apply for a loan from ICICI bank or ask for an overdraft from ICICI bank (OD).
One of the financial instruments that we are most familiar with is a fixed deposit. Due to its simplicity of investing, guaranteed returns, flexibility, and other benefits, it is a customer favourite.
You can use this deposit to earn money while assisting your short- and long-term financial needs. For example, you might obtain an overdraft or loan against your fixed deposit. The only requirement is to have a fixed deposit on hand. The procedure is easy, hassle-free, and straightforward.
Also, check - ICICI Fixed Deposit Interest Rates 2023
Q1. Can I get a loan from ICICI Bank based on my FD?
Yes, you can obtain a loan from ICICI Bank secured by an FD. You do not have to take any money out of your fixed deposit early and forfeit the interest. With a loan against an FD, the fixed deposit will serve as security for the loan. Typically, the loan's interest rate is 2 to 3 percentage points more than the FD interest rate.
Q2. Where can I get a loan against my FD from ICICI Bank?
There are various options to get a loan from ICICI Bank FDs, and you can choose either online or offline modes to do so. If you want to do it offline, you can go to the home branch where you hold a fixed deposit and speak to the bank executives who will help you. If you choose to do it online, you can either do it through internet banking or the iMobile mobile banking application. When you do it online, you must go to the FD account and choose the loan over the FD option.
Q3. Is taking out a loan against FD a wise idea?
Yes, taking out a loan against an FD is a wise move. The interest rate on personal loans and other forms of funding is greater. The loan is more expensive than an FD loan. Typically, the loan's interest rate is 2 to 3 percentage points more than the FD interest rate. There is no prepayment penalty and no processing cost for loans. It is preferable to seek a loan for the amount you require rather than withdrawing your entire FD, allowing the remaining funds to continue earning interest.
Q4. How much time can I take to repay the loan that I borrowed over my fixed deposit from ICICI Bank?
You will have to repay the loan before the fixed deposit maturity. This is because your ICICI Bank fixed deposit had played as the collateral towards the loan that you had borrowed from the bank. Therefore, the repayment of the loan needs to be done before the fixed deposit matures.
Q5. What is the highest amount that I can take as a loan against my Fixed deposit from ICICI Bank?
You can get up to 90% of your fixed deposit value as a loan against it. This means - the larger the amount of your fixed deposit, the more you can borrow over the fixed deposit account that you hold in the ICICI Bank.