Liquidating your Fixed Deposit (FD) when you are in need of money is not a profitable decision because if you do so, you lose out on the interest and also end up paying a penalty amount. Once the FD is liquidated, the bank pays interest at a rate that is lower among the rates at which the FD was approved and the rate of interest on the day of liquidation. To save yourself from these financial hassles and fulfill your emergency cash needs, State Bank of India provides the facility to avail a loan against your FD. This is a good option as it ensures that the benefits you derive from the Fixed Deposit account stay intact, and offers the loan at a comparatively lower rate of interest. Another benefit of the overdraft against fixed deposits is that the borrower keeps on earning interest on his existing fixed deposit scheme even if the loan has been sanctioned by the bank. This interest can be used for the prepayment of the loan as the bank also does not levy any foreclosure charges in case the loan is repaid before the tenure of the overdraft ends.