Fincare Small Finance Bank Extends Instant Overdraft Facility Against FD
Short-term funding needs, especially for health emergencies, can arise anytime, anywhere, especially during the current pandemic. The Bank has extended an instant overdraft facility against FD to help clients overcome these financing needs. Clients can take advantage of the instant overdraft facility against FD anytime, anywhere. Customers do not need to liquidate their FD to benefit from this facility.
“The overdraft facility against term deposits, used wisely, can help intelligently meet short-term funding needs without having to liquidate the term deposit before maturity and also avoid rate penalties,” said Keyur Doshi, CFO of Fincare Small Finance Bank.
Bank FDOF facility (Overdraft against Fixed Deposits)
This is a real-time, convenient and efficient way to secure a short-term loan, rather than terminating the FD prematurely; In this FDOD facility, customers can withdraw up to 75 percent of the value of the fixed deposit. The facility is available to customers holding a fixed deposit with Fincare Small Finance Bank and active on the Mobile Banking app.
How it works?
Let’s say you have an FD of â¹1 Lakh with Fincare Small Finance Bank earning interest at 7% per annum, with a maturity of three years. The bank offers a 75 percent overdraft limit on this FD, i.e. â¹75,000. If you withdraw â¹30,000 of the overdraft limit on this fixed deposit, interest is only due on â¹30,000 and not on the whole â¹75,000.
The interest rate charged will be 2% above the fixed deposit rate (assuming you are a non-senior citizen). Thus, you will pay 9 percent interest per year only for the period (days or months) for which the amount is used and not for the entire duration of the fixed deposit with the bank.
Why choose the overdraft against FD?
There are many surprises in store for life – a temporary business slowdown, job loss, or pay cut due to the COVID-19 pandemic. The FD overdraft facility is a recommended option for meeting immediate financial needs or family medical emergencies. This facility has a lower cost than options like personal loans, pre-approved loans against credit cards, etc.
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