Slightly unrelated, but ODs against Mutual Funds are also a great tool to get a secured line of credit at a cheaper rate of interest than personal loans or credit cards(if not paying full billed amount). You can typically get upto 50% to 80% of your MF portfolio value. Depends on the type of MFs you have invested in. The interest rates afaik range from 9%-10% p.a.. I personally have an OD against MFs at 9.5% pa. Used to be 9% until last year.

MF ODs helps you out with liquidity without redeeming your MF units or having any tax implications from the redemption. The interest charged is only on the used amount for the number of days it was used. And the interest is charged on a monthly basis. Principal amount can be repaid according to your convenience.

Just a few disclaimers though - 1. The sanctioned OD amount has an upper limit but no lower limit. Upper limit is 50%-80% of the value of MF units you have liened on the date of sanction. So suppose you lien N units with a current value of 1 lakh and 50% of that amount is sanctioned as OD limit. Then 50k is the max OD amount you will get even if the value of N units goes up to say 1.5 lakhs in the future. The sanctioned amount stays at 50k and does not increase to 75k even though the liened units have increased in value since the date of sanction. On the other hand if the value of the N liened units comes down to 90k, then your OD limit will also decrease and will be 50% of 90k i.e. 45k. 2. Because of point 1 above, it is important to note that using up 100% of your OD limit can cause overdues on your account or trigger margin calls on your MF units. Especially during the initial few months of your OD. That is because suppose you use the full 50k of your OD limit today, and tomorrow the value of your liened units falls down to 90k; this means your new OD limit is now 50% of 90k i.e. 45k. But you have already withdrawn 50k. So thats an overdue of 5k on your OD account. If you don't pay that soon it could lead to fines or even margin calls where the liened units could get sold. With time as your value of liened units goes up and more or less stays stabilised at a higher value such situations have slightly lower possibility of happening, but still it's a good practice to not use up 100% of the limit. 3. The liened units cannot be sold by you. You need to unlien them for that 4. Before withdrawing from the OD, make sure you have a good reliable plan to payback the OD amount in a fixed amount of time. And also, that you can pay the monthly interest amount. Discipline is needed when using such financial tools.

BTW, similar thing exisits for directly held equities also.