How can the Overdraft Facility in SBI be Availed?

Need for extra funds can crop at any point of time. Going with regular loans for meeting short  term expenses is an expensive option. What other options are we left with? There is one where you pay low interest rates and meet your short-term financial needs with ease. The Overdraft Facility in SBI let’s you do that. This is an overdraft facility provided by the State Bank Of India. Under this facility, you can withdraw or use more money than you have on your account up to a certain permissible limit. So, whether you want more funds to make your travel experience better or need some urgent funds for some unforeseen wedding expenses, the Overdraft facility in SBI has your back. The interest rate you pay is fairly cheaper than regular loans.

What are the Features of SBI Overdraft Facility Against Term Deposits?

• The Overdraft Loan provided by SBI is secured in nature. This means that in order to avail the overdraft facility the individual needs to submit a collateral. The securities can either be shares or term deposits or gold bonds.
• SBI provides high overdraft limits as the nature of the loan is secured. Secured loans minimise the risk of default. If you take an overdraft loan against time deposit, the overdraft limit you can get can be upto 90% of the value of your time deposit. The maximum overdraft limit that can be availed is INR 5 crore against your time deposit.
• Unlike some normal loans, where you have to pay prepayment charges in case you decide to prepay the loan, the Overdraft Loan SBI allows you to prepay your overdraft amount without any prepayment charges.
• For almost every loan (personal or home) provided by Banks and Non Banking Financial Companies, they charge processing fees before they grant you the loan. But SBI charges zero fees for processing the Overdraft Loan.  
• Interest rates offered by the State Bank on overdraft loans are comparatively lower than personal and home loans. Also, the interest charged is on a daily reducing balance.
• The repayment schedule is determined by the State Bank on the basis of your repayment ability, if the loan is taken through a branch. In the case of online overdraft facility, the repayment tenure is capped at  5 years for STDR (Special Term Deposit)/STDR-e and 3 years for TDR (Term Deposits)/ TDR-e.

What is the Overdraft Interest Rate in SBI?

After the announcement by RBI about the interest rate on credit products should be linked to the repo rate, SBI had to change the overdraft interest rate. The overdraft interest rate in SBI has come down to 7.40 percent (2.25% plus the present repo rate). This initiative has been taken to make credit products easily available to the customer so that the economic crisis in hand can be evaded sooner. So, if you are planning to take a cheaper credit option, the overdraft facility in SBI is the best bet. This is because the overdraft interest rate in SBI is lower as compared to other banks.

How to Apply for an Overdraft Facility in SBI Against Term Deposits ?

The application procedure is really simple with minimum documentation procedure. All you have to do is check your eligibility criteria and complete the minimum documentation procedure. You can either apply for the loan by visiting  SBI’s official website and logging into your net banking or visit the nearest branch for offline facilities.

Eligibility Criteria For an Overdraft Loan by SBI:

• The applicant should be an SBI Account Holder. The account can be a joint account or single account.
• They should also hold a term deposit in SBI. Any of the following term deposits would do - TDR/STDR / RD / including NRE/NRO/RFC and FCNR(B) Deposits.
• If single account holder uses the SBI’s Internet Banking Platform, they can use the same to avail the SBI Overdraft Loan against Term Deposits.