If the need of money falls in emergency, company can take loan in lieu of FD


In this case loan against FD will help you

In recent times, the country’s major banks have cut fixed deposit rates. While interest in FDs of some housing finance companies and non-banking financial companies has increased.

To make corporate FDs more attractive amid the Corona epidemic, these institutions have reintroduced features such as pre maturity withdrawal and loans in lieu of these FDs.

Also Read: For the first time in the country, more than 10,000 new cases and 334 deaths in one day

If you opt for pre-mature withdrawal, then the entire FD is canceled and you will get less interest for the period which was earlier fined. Another issue with premature withdrawal is that you do not require the entire FD amount.

Since partial withdrawal from FD is not allowed, you must withdraw the entire FD. In such a situation, loan against FD will help you.

Most HFCs and NBFCs that accept fixed deposits from customers are now allowing loans in lieu of deposits. However, there are some terms and conditions. Loans can be taken in lieu of these FDs only after three months of starting FDs.

Depositors can avail up to 75% of the deposits in the form of loans. These loans can be repaid either before the maturity of the fixed deposit or in installments.

If you are unable to repay the loan before the maturity of the FD, the loan amount along with the deposit interest will be adjusted against the fixed deposit amount outstanding at the time of maturity.


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