What Is SBI OD Account And Is It Beneficial?

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State Bank Of India offers an OverDraft (OD) account for all the customers. The benefit of OD is that it makes it easier for you to borrow a loan. Yes, it is an account using which you can withdraw the desired amount within the limit. And the end set by SBI based on some criteria. Read this article to find out the features of SBI OD account and the maximum limit of the OD account.
Create an SBI OD account with internet banking
Visit the online website of State Bank Of India, to open an overdraft account with it. If you have a Fixed Deposit (FD) in SBI, it is easier for you to open an OD account. As, the bank provides an OD account against your SBI FD. A maximum loan amount of INR 5 crore limit is set for your SBI OD account depending on your FD value. If you have a regular term deposit scheme then you can avail 75% of your FD value otherwise, a special term deposit scheme offers 90% of the FD value. The reason for the different OD limits against FD is because STDR accumulates higher interest in comparison to TDR fixed deposit.
How do I pay the SBI OD account loan?
If you borrow a loan from your OD account then you can pay the loan within the tenure. SBI provides a duration for your borrowed amount in which you need to pay the loan. An interest rate is also charged to your borrowed amount that is 1% above your FD interest rate. You can withdraw the amount from your OD account using cheque or SBI net banking services. And, don’t forget to apply for a cheque book when your OD account is created. To request the SBI OD account cheque book use the Yono app.
Why is the SBI OD account better from loans?
The question may arise in your mind while reading that is an OD account better than borrowing a loan from a bank. Then the answer is yes, because loans attract a high interest rate compared to SBI OD accounts. For example, if your FD interest rate is 5.50% at the time opening an OD account then the interest charged to your borrowed amount would be 6.50%. On the other hand, the interest rate on personal loans remains fixed for the given time, which is 5 years.
You can use the SBI OD account same as the loan, a slighter difference is that you can transfer funds anytime to your bank account whenever there is a requirement of the fund. Although you will not get this privilege on any loan. So, open an OD if you wish to experience its benefits. With the help of an OD account, you can pay debts and can manage high expenses like marriage or a medical emergency. Now ditch your loans and take help from State Bank of India to open an OD account using the online services which are available for 8 to 20 hours IST for the customers.
Location: India

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