Uncertainties are an integral part of life that we have to accept and live with. But, at the same time, there’s no need to make it an excuse for not able to do a stuff, and more so the financial needs. There are several financial instruments such as overdraft that can help do so. It is a credit you get from the bank against collaterals such as fixed deposits. The money given via overdraft can be withdrawn or used from the respective accounts.
So, be it the settlement of previous loan, unplanned travel expenses or even the medical treatment, death, etc, an overdraft facility can be extended to you anytime. In today’s edition, the focus will be on the top banks so that provide this service.
SBI Overdraft Loan Account
This is provided to meet the desires of family vacation or resolve the emergence of a sudden medical treatment against the fixed deposit, which could be either Term Deposit Receipt (TDR) or Special Term Deposit Receipt (STDR). The overdraft loan account would be created for the purpose and a loan up to 90% of the FD value can be disbursed.
The minimum and maximum credit to be extended are ₹25,000 and ₹5 crores, respectively. The repayment period can be granted up to 5 years against STDRs opened either through branch or online. On the other hand, you can be given a maximum of 3 years to pay off the loan extended against TDRs or e-TDRs.
Since the overdraft is secured against the lien on the fixed deposit, the interest rates would be lower than an unsecured credit. The interest rate, in fact, stands 1% above the prevailing fixed deposit rate. There won’t be any processing fee. However, the facility is strictly for individual customers having fixed deposits with SBI. Joint account holders shall not apply.
HDFC Smartdraft – Overdraft Facility Against Salary
Your HDFC Bank Corporate Salary Account can help you get the facility, namely Smartdraft. The funds can be given up to 3 times your salary. While the minimum amount is ₹25,000, the maximum can reach up to ₹1 lakh. The interest will accrue only on the utilized amount. Plus, there are no pre-closure charges.
The bank can renew your overdraft limit after 12 months based on the account performance and salary credits. It can charge a renewal fee of ₹250. You can withdraw the funds via ATMs, cheques or even through online transfers. For availing overdraft, though, you are required to have a minimum net monthly salary of ₹15,000. In addition, the workplace where you work at must be on the approved list of this facility.
ICICI Salary Overdraft
ICICI Bank is another top lending institution involved in getting the instant needs or desires fulfilled via an overdraft. It gives the facility against the salary you get month-on-month on the ICICI Bank account. The overdraft amount can double to that of your net monthly income, within a maximum cap of ₹4 lakhs. The interest will be charged only on the amount utilized.