Loan against fixed deposit is cheaper, more flexible than a personal loan

The effective rate of interest comes to 1-2%

• When in need of urgent funds, many either liquidate their fixed deposit (FD) or take a personal loan. A better option to fund your short-term cash need is to take a loan against FD

• Loan against FD is not only cheaper but also flexible. If a person has a three-year State Bank of India FD at 6.8 per cent, he can get a loan at 7.8 per cent. The interest rate on a personal loan would be upwards of 15 per cent

• The best part: your FD continues to earn interest. The effective cost of the loan, therefore, would come to 1-2