Sometimes we need money urgently. It could be for a medical emergency, a big purchase, or just to manage our monthly expenses. In such situations, many people break their fixed deposits (FDs) to arrange funds. But did you know there’s a better option? Axis Bank offers a smart solution called Overdraft Against Fixed Deposit (FDOD).
Let’s understand what it means and how it can help you.
What is Overdraft Against Fixed Deposit?
Overdraft against fixed deposit is a loan facility provided by Axis Bank where you can borrow money using your FD as security. Instead of breaking your FD, the bank gives you access to money in the form of an overdraft. You can use this money as needed and pay interest only on the amount you actually use.
Why Choose FDOD Instead of Breaking Your FD?
Breaking an FD before maturity usually comes with a penalty and reduced interest. But with FDOD, your FD continues to earn full interest, and you still get access to funds. It’s like enjoying the best of both worlds—you keep your investment intact and get liquidity when required.
Key Features of Axis Bank FDOD
Let’s look at some important features of this facility:
- Loan Limit: You can get an overdraft of up to 85%–90% of your FD amount.
- Low Interest Rate: The interest rate is just 1% to 2% higher than your FD rate. This is much lower than personal loan interest rates.
- Pay Only for What You Use: If you don’t use the full overdraft limit, you don’t have to pay interest on the entire amount. Interest is charged only on the amount you use.
- No EMI Pressure: Unlike personal loans, there are no monthly EMIs. You can repay the amount anytime before the FD matures.
- Instant Access: You can apply for FDOD online through the Axis Mobile App or Internet Banking. It’s quick and paperless.
- Zero Processing Fees: There are usually no extra charges, making it cost-effective.
Example to Understand Better
Suppose you have a fixed deposit of ₹1,00,000 in Axis Bank. The bank offers you an overdraft limit of ₹85,000. You only need ₹30,000, so you withdraw that much.
Now, you will be charged interest only on ₹30,000. Let’s say the FD interest rate is 6.5%, and your OD interest rate is 8.5% (i.e., 2% extra). You will pay only 8.5% interest on ₹30,000, and not on the entire ₹85,000.
If you return the ₹30,000 after one month, your FD will remain untouched, and you would’ve used the overdraft smartly without breaking your deposit.
Who Can Apply?
Any Axis Bank customer with a fixed deposit of at least ₹25,000.
Individuals holding FDs in single or joint names (with “Either or Survivor” option).
Both salaried and self-employed individuals are eligible.
How to Apply?
Axis Bank has made the process very simple and digital. You can apply in three ways:
- Through Axis Mobile App:
Log in to the app.
Go to the “Loans” or “FD” section.
Select “Overdraft against FD.”
Choose your FD and enter the overdraft amount.
Confirm and submit.
- Via Internet Banking:
Log in to Axis Bank Internet Banking.
Go to the “Accounts” > “Fixed Deposits” section.
Click on “OD Against FD.”
Enter details and confirm.
- At the Branch:
You can also visit your nearest Axis Bank branch.
Submit the FDOD request with minimal paperwork.
Advantages of FDOD
Quick and Easy: Get funds within minutes, especially if done online.
No Risk to Your FD: Your fixed deposit continues to earn interest.
Flexible Repayment: Pay back the amount whenever you can.
Affordable Interest: Much cheaper than other loan options.
Final Thoughts
Overdraft Against Fixed Deposit is one of the most convenient and cost-effective ways to get money in times of need. It is especially useful for those who want to keep their savings safe but still need urgent funds. Axis Bank has made this facility very customer-friendly with online access, no hidden charges, and flexible repayment options.
If you have a fixed deposit with Axis Bank, you should definitely consider the FDOD facility before going for a personal loan or breaking your FD. It’s simple, smart, and saves you money.
