SBI's loan against fixed deposit is the cheapest, fastest source of credit for most Indian savers — yet most people default to expensive personal loans because they don't know the FD-loan option exists. Rate: FD-rate + 1.00% (so ~7-8% APR vs personal loan 10.5-16%). Approval: same-day, no CIBIL check, no income docs. FD continues earning interest. Here's the complete YONO + INB process + when this beats personal loans + when it doesn't.
The basics — what is "loan against FD"
You pledge an existing SBI fixed deposit as collateral. SBI marks a LIEN on the FD (effectively freezes it) and gives you a loan up to 90% of the FD value. Key facts:
- FD continues earning interest at the booked rate — not broken, not closed
- Loan interest rate = FD rate + 1.00%
- Loan tenure = up to FD maturity date (max 5-7 years for standard FDs)
- Approval: same-day via YONO / INB, no CIBIL check, no income verification
- Prepayment penalty: ₹0
- Processing fee: 0.50% of loan amount (max ₹5,000)
The real interest math — vs personal loan
| Scenario | Loan against FD | SBI Personal Loan |
|---|---|---|
| Loan amount | ₹5,00,000 | ₹5,00,000 |
| Tenure | 2 years | 2 years |
| Interest rate | 7.50% (FD 6.5% + 1%) | 11.00% |
| EMI | ₹22,468 | ₹23,316 |
| Total interest paid | ₹39,238 | ₹59,592 |
| FD interest still earned | +₹65,000 (over 2 years) | — |
| Net cost | ₹39,238 − ₹65,000 = −₹25,762 (gain) | ₹59,592 (cost) |
| Approval time | Same-day | 7-10 days |
| CIBIL impact | None | Hard inquiry, ongoing reporting |
| Documents | None (FD already exists) | Salary slip + bank statement + ID + address proof |
Same loan amount, same tenure — loan against FD saves ₹84,830 vs personal loan over 2 years (after accounting for the FD interest you continue earning). The math gets stronger for longer tenures + higher amounts.
Step-by-step: Loan against FD via SBI YONO app
- Open SBI YONO app → log in with your MPIN / biometric
- Navigate to "Loans" → "Loan Against Deposits"
- Select the FD you want to pledge from the displayed list (only FDs in your name with sufficient maturity period show up)
- Enter the loan amount (up to 90% of FD value)
- Review the terms — interest rate, tenure, EMI, processing fee
- Click "Apply" → OTP verification
- Loan amount is credited to your SBI savings account within 2-4 hours (same-day during business hours)
- SMS confirmation + email statement
No physical visit. No document upload. No KYC re-verification. The FD already has all the required data.
Step-by-step: Via SBI Internet Banking (INB)
- Log into onlinesbi.sbi
- Click "e-Services" → "Loan Against Deposits"
- Select the FD to pledge
- Enter loan amount
- Review terms → OTP verification
- Loan disbursed to savings account same-day
When loan against FD beats personal loan
| Scenario | Best path | Reason |
|---|---|---|
| Need ₹1L-25L for < 24 months | Loan against FD | Cheapest path; no CIBIL impact |
| Medical emergency (need cash today) | Loan against FD | Same-day approval; no income docs |
| Avoiding CIBIL hard inquiry | Loan against FD | No credit check at all |
| Don't want to break FD (penalty) | Loan against FD | FD untouched; continues earning |
| Need ₹25L-50L for 5+ years | Personal loan or business loan | FD-backed loans cap at FD value |
| No existing FD with the bank | Personal loan | Open FD first if you can wait 7-15 days |
| For income tax 80C deduction | Personal loan for housing / education | FD-loan interest isn't deductible |
Same product at other Indian banks
| Bank | % of FD as loan | Interest spread above FD rate | Online? |
|---|---|---|---|
| SBI | 90% | +1.00% | YONO / INB |
| HDFC Bank | 90% | +1.00-2.00% | Mobile + NetBanking |
| ICICI Bank | 90% | +2.00% | iMobile + iNB |
| Axis Bank | 85% | +1.50-2.00% | Mobile + NetBanking |
| Kotak Mahindra | 90% | +2.00% | App + NetBanking |
| PNB | 90% | +1.00-1.50% | NetBanking |
| Bank of Baroda | 90% | +1.00-1.50% | NetBanking |
| Canara Bank | 90% | +1.50% | NetBanking |
| IDFC FIRST | 90% | +1.50% | Mobile + NetBanking |
SBI and the public-sector banks generally offer the cheapest spread (1.00% above FD rate). Private banks charge 1.50-2.00% spread but offer better digital UX.
Repayment + lien release
- EMI option: Standard EMI deducted monthly from your SBI savings account
- Bullet repayment: Pay the entire loan + interest at the end of FD tenure
- Partial prepayment: Any amount, any time, ₹0 penalty
- Once fully repaid: lien on FD is released within 1-2 working days; FD reverts to your full control
Risks and what to avoid
- Don't take loan against FD for speculative purposes (stock trading, crypto, F&O). If the investment goes down, you lose both the FD AND incur unpaid loan interest.
- Don't pledge FDs you'll need for tax-saving (5-year tax-saver FDs under Section 80C have a lock-in; pledging may not be allowed and lien-marking complicates withdrawal).
- Don't take a 5-year loan against a 1-year FD — when the FD matures, the loan must be repaid in full (or you need to renew the FD with another lien).
- Senior citizens: be aware that lien-marked FDs may complicate inheritance — make a clear nominee declaration before pledging.
Calculators to use
- EMI Calculator — model loan EMI at any interest rate
- FD Calculator — see what your FD earns at maturity vs broken early
For comparison with other low-cost loan options (loan against shares, loan against insurance policy, gold loan), see /loans.
Sources: SBI Loan Against Deposits product page (May 2026); SBI YONO + INB user guides; RBI Master Direction on Loans and Advances (2016); SBI interest rate schedules verified May 2026; comparative loan rate data from HDFC, ICICI, Axis, Kotak loan-against-FD pages.
Frequently Asked Questions
What's the interest rate on SBI loan against FD?
SBI charges an interest rate of FD rate + 1.00% on loans against fixed deposits — significantly cheaper than personal loans (which run 10.5-16% APR). Example: if your SBI FD is earning 6.50%, the loan against that FD costs 7.50%. The FD continues earning the full 6.50% during the loan period, so your NET cost is just the 1.00% spread. As of May 2026, SBI's loan-against-FD rates range from 7.00% to 8.50% depending on your underlying FD's interest rate.
How much loan can I get against my SBI FD?
SBI sanctions up to 90% of your FD value as loan, with a minimum loan amount of ₹25,000 (varies by scheme). Example: ₹10 lakh FD = up to ₹9 lakh loan. The full 100% is rarely sanctioned to maintain a safety margin for the bank. Some special schemes (e.g., SBI Overdraft Against Fixed Deposit for Premium customers) sanction up to 95%. Senior citizens with SCSS or PMVVY deposits may get slightly higher percentages.
Will my FD be broken to give me the loan?
No — the FD is NOT broken. SBI marks a lien on the FD (effectively freezes the FD as collateral) but the FD continues to exist and earn the full booked interest rate. When you repay the loan, the lien is removed and the FD reverts to your full control. If you default on the loan, SBI can break the FD to recover the loan amount + interest — but this is the worst-case scenario.
How long does the loan-against-FD approval take in SBI?
Same-day for online (YONO / INB) applications — typically within 2-4 hours during business hours. The loan amount is credited directly to your SBI savings account. For branch applications, allow 24-48 hours. There's no CIBIL check, no income verification, no document upload — the only requirement is that the FD is already in your name at SBI. The instant nature is the biggest advantage over personal loans, which take 7-10 days.
Can I repay the loan against FD early without penalty?
Yes — SBI charges ZERO prepayment penalty on loans against FDs. You can repay the loan in full or partially at any time during the loan tenure. Repayment options: (1) Direct transfer to the loan account via net banking, (2) Cheque deposit, (3) Auto-debit from savings account (set up via INB). Once the loan is fully repaid, the lien on the FD is automatically released within 1-2 working days, and the FD reverts to your full control.
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