How to Open, Repay and Close an Overdraft on Fixed Deposit in SBI Online Banking

Managing finances efficiently is a crucial aspect of every individual's life. One of the financial strategies that can provide additional liquidity is an Overdraft facility on Fixed Deposits. This handy service allows account holders to borrow against a fixed deposit until a specific limit. This article aims to guide you through the process of opening, repaying, and closing this facility through SBI's online platform.

Understanding an Overdraft on Fixed Deposit (OD on FD)

An Overdraft on Fixed Deposit (OD on FD) is a financial facility provided by State Bank of India (SBI) that allows you to withdraw funds in excess of your fixed deposit balance, up to a pre-approved limit. The interest on this overdraft is charged at a variable rate. An OD against an FD is a convenient tool for utilizing the excess funds in a fixed deposit to meet short-term financial needs, ensuring that the principal amount of the fixed deposit remains untouched until its maturity.

How to Open an OD on FD in SBI Online Banking

Opening an OD on FD is straightforward and can be done through the SBI online banking portal. Here’s how you can do it:

Log in to your SBI online banking account. Navigate to the Fixed Deposit section, typically found under the Investments or Products menu. Look for the option to Check OD Facility or Chequebook OD. Click on this option to proceed. Follow the on-screen instructions to provide your required details and submit your application. Once approved, you will receive a confirmation email or SMS from SBI.

Remember, the approval process and the amount of overdraft depend on your account and SBI's criteria, so it's important to keep your financial records in order.

Repaying the OD on FD

To repay the OD on your fixed deposit, you can follow these simple steps:

Again, log in to your SBI online banking platform. Navigate to the OVERDRAFT section or use the search function to locate it. Look for the option to repay the OD balance, usually found under the Repayment or Settlement section. Enter the amount you wish to repay, and confirm your payment details. Submit the repayment request and complete the transaction.

It's important to repay the overdraft amount in a timely manner to avoid additional interest charges and penalties. SBI provides the entire outstanding amount, including accrued interest, as the option for repayment, ensuring you are fully aware of the financial commitment.

Closing an OD on FD

Closing an OD on FD is the final step once you no longer need or wish to use this facility. Here's how you can do it:

Log into your SBI online banking portal. Navigate to the Fixed Deposit Overdraft section. Finding the option to Close OD. This is often under the animation or closure section. Select your OD account and follow the instructions to proceed with closing the OD facility. Confirm the closure process and complete the necessary documentation.

Once closed, your OD facility on the fixed deposit will no longer be available. However, the interest earned on the OD, depending on your agreement, may continue to accrue until the closure date.

Conclusion

Using the OD on FD feature offered by SBI is a secure and convenient way to make the most of your fixed deposit balances. Whether you need temporary liquidity or need to fulfill a short-term financial need, this service provides flexibility and convenience.

For further assistance or detailed inquiries, always reach out to the SBI customer support or consult with your nearest SBI branch.