What Is a Gold Overdraft Facility and How Does It Differ From a Regular Gold Loan?
A gold OD is a revolving credit line secured against your gold. Unlike a term loan where you borrow a fixed amount, OD lets you withdraw and repay any amount within the limit. Interest is charged only on the utilized balance, calculated daily.
Banks offering gold OD include SBI, ICICI, Federal Bank, and HDFC. OD interest rates are typically 1–2% higher than term gold loan rates, but the interest savings from lower utilization usually outweigh the rate premium.
How Is Interest Calculated on a Gold Overdraft Account?
The daily product method: (Outstanding Balance × Annual Rate) ÷ 365. Interest is debited monthly. If you use only 60% of your ₹5L limit, you pay interest on ₹3L — saving 40% compared to a full-amount term loan.
For detailed per-day cost tracking, use our Daily Interest Calculator.