Loan Against Investments: Is Your FD or MF Enough?

Banks are launching new digital tools — borrow against stocks or mutual funds up to ₹5 crore, and move your FASTag between banks without replacing it. Here's what these changes mean for your money.

Here's what happened: Bank of Baroda launched bob PAL, a digital overdraft facility that lets customers pledge securities like stocks, mutual funds, and bonds to borrow up to ₹5 crore instantly.. Federal Bank introduced OneTag, a FASTag portability feature built into the RajmargYatra app that lets VC4 vehicle owners switch their FASTag to a different bank without replacing the physical tag.. Both products are part of a broader push by Indian banks to digitise credit and payment services that previously required branch visits or manual paperwork..

What you should do: Check if your bank or broker offers a loan against securities or mutual funds before breaking an FD early — you avoid both the penalty and losing future returns.. If you use FASTag and want to change your linked bank account, download the RajmargYatra app and check if your vehicle category (VC4) qualifies for OneTag portability before applying for a new tag.. Compare the interest rate on any loan against securities with your current personal loan or credit card offers — the pledged-asset route is almost always cheaper for short-term needs..

With a loan against mutual funds, your units stay invested and keep earning NAV gains — you only lose money if markets fall below the lender's margin threshold, not automatically.