Credit cards are beneficial to users for reasons more than one. Not only do they come useful in times of cash crunch but also help to build a credit score for taking a loan in the future. In fact, several e-commerce websites allow you to purchase certain products on EMI through credit cards only. However, not everyone can get a credit card. Your bank will deny it to you if don’t meet the minimum income criteria or have low or no credit score among other reasons.Read more
Save upto ₹46,800 in tax under Sec 80C
Inbuilt Life Cover
Tax Free Returns Unlike FD+
However, there is another way to get you a credit card. You can apply for a credit card against your Fixed Deposits (FDs). Investing money in fixed deposits is extremely popular as many banks provide the best fd rates and let its customer earn good returns. You can check banks like HDFC Bank to find out about HDFC Bank FD rates. If you have been trying to get a credit card for long, try applying for a credit card against your fixed deposit, also known as a secure credit card.
Banks have the provision of allowing their customers to apply for credit cards against existing fixed deposits. A secure credit card is a type of credit card that can be requested against an existing fixed deposit with a bank. If you don’t have a fixed deposit, you can open it at a bank that offers the best FD rates and eventually applies for a secure credit card. For instance, if you want an HDFC Bank credit card, you can check the HDFC Bank FD rates and open a fixed deposit.
The good part about a secure credit card is that you can obtain it on an affordable FD amount of Rs 10,000 to Rs 20,000, depending on your bank. However, your FD amount plays an important role in determining your credit card limit. Most banks fix 75% to 85% of the FD amount as the limit of the credit card. Therefore, the higher the amount of your FD, the higher will be your credit card limit.
|You May like to Read: SBI FD Interest|
However, you need to suffice the minimum age requirement to be able to apply for a credit card against your fixed deposit. Different banks have different minimum age eligibility criteria that may range from 18 years or 19 years to 21 years of age. You will have to check with your bank to know the exact minimum age requirement.
You will also have to pay an application fee along with a processing fee while applying for a secure credit card.
If you are wondering whether you should opt for a secure credit card or not, take a look at these four amazing benefits of applying for a credit card against your fixed deposit.
A major consideration by banks before issuing a credit card to a customer is to check his/ her credit history. A person’s credit history allows the bank to determine how likely the applicant is to pay his/her credit card bill on time. You need to have a decent credit history to be able to obtain a credit card. If you have a poor credit history then your bank will reject your credit card application.
But in case of a secure credit card, people with poor or no credit history can also get a credit card. This is because your credit history will not be considered as eligibility criteria to obtain a credit card against your fixed deposits. On the contrary, you can use a secure credit card to improve your credit history or CIBIL score by making timely payments.
Banks prefer giving credit cards to customers with stable income. People with regular income are less likely to miss paying their credit card bill on time than people with irregular income. As a result, credit card applicants are required to present documents supporting their proof of income at the time of applying for a regular credit card. If your income does not meet the minimum income criteria of your bank, your credit card application will get rejected.
However, this is not the case in a secure credit card. Banks do not ask their customers for any proof of income as fixed deposits are considered as proof of financial security. In fact, people with low income can also get a higher credit card limit with the help of their fixed deposit amount. Thus, it is a better alternative for people seeking a credit card but has poor income.
In order to get a regular credit card, many documents are required to be submitted in the bank. These documents include proof of income, identification proof, proof of residence, etc. Only after the bank is satisfied with all your documents, it will issue you a credit card. The procedure can be a little lengthy and time-consuming.
On the other hand, applying for a credit card against your fixed deposit is a much easier and quicker process. The paperwork involved is minimal since you already have an account in the bank and it has most of the required documents. Other documents like proof of income loose importance in a secure credit card as your fixed deposit act as a security deposit. In fact, most banks only ask for identification proof and issue a secure credit card within five to seven working days.
Owning a regular credit card has a lot of advantages like free travel insurance, personal accident cover, reward points, etc. But having a credit card against your fixed deposit has added advantages. You are able to enjoy the perks of a credit card along with the benefits of investing in a fixed deposit. Banks provide the best FD rates and the interest that you earn on your deposits adds to the advantages of a credit card. For instance, if you have a secure credit card of HDFC bank, you enjoy the HDFC Bank FD rates on your fixed deposit along with the perks attached to your HDFC Credit Card. Moreover, some banks also provide an initial interest-free period on a secure credit card, ranging from 48 to 55 days.
Over to you!
Fixed deposits that earn interest on the best FD rates can be more useful than you think. Besides helping you to get a loan, it also helps you to apply for a credit card against your fixed deposit. This acts as a boon for people who are unable to get a regular credit card due to insufficient document or poor credit history amongst other reasons. If you happen to be one of those people, contact your bank to apply for a credit card against your existing fixed deposits.
|FD Interest Rates|
|SBI FD Interest Rates||HDFC FD Interest Rates|
|ICICI FD Interest Rates||Axis Bank FD Interest Rates|
|Canara FD Interest Rates||Yes Bank FD Interest Rates|
|Kotak Mahindra FD Interest Rates||Bandhan Bank FD Interest Rates|
|Union Bank of India FD Interest Rates||Indusind Bank FD Interest Rates|
|PNB FD Interest Rates||Bank of Baroda FD Interest Rates|
|IDFC Bank FD Interest Rates||Indian Bank FD Interest Rates|
|RBL Bank FD Interest Rates||UCO Bank FD Interest Rates|
|Karnatka Bank FD Interest Rates||Bank of India FD Interest Rates|
|IDBI Bank FD Interest Rates||Central Bank of India FD Interest Rates|
|Bank of Maharashtra FD Interest Rates||Citi Bank FD Interest Rates|
|Allahabad Bank FD Interest Rates||Indian Overseas Bank FD Interest Rates|
|Andhra Bank FD Interest Rates||Corporation Bank FD Interest Rates|
|DBS Bank FD Interest Rates||Syndicate Bank FD Interest Rates|
|Dena Bank FD Interest Rates||Vijaya Bank FD Interest Rates|
|State Bank of Travancore FD Interest Rates||State Bank of Mysore FD Interest Rates|
|State Bank of Hyderabad FD Interest Rates|
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
24 Nov 2023A Tax Saving Fixed Deposit is a financial instrument designed to
31 Aug 2023Banks in India play an important role in the country's financial
14 Aug 2023Karur Vysya Bank or KVB FD interest rates range from 4.00% to
10 Jul 2023एचडीएफसी एफडी ब्याज
18 Apr 2023Savings and emergency funds are two crucial aspects of financial