Credit Card Against FD

How Does a Credit Card Against FD Work?

A credit card against an FD is offered by banks using your existing fixed deposit as security, rather than your credit history. Based on your deposit amount, the bank usually offers a credit limit of 80% to 90% (up to 100% on the IDFC FIRST WOW credit card) of the FD value.

Your FD continues to earn interest even when it is pledged as security, based on the applicable FD interest rates offered by the bank. A credit card against FD is especially useful for individuals who don't have any income proof to apply for a credit card. Since the process is simpler and requires minimal documentation, you don’t have to worry about your credit history or the absence of one. By using the card responsibly and paying credit card bills on time, you can build or improve your credit score.

Best Credit Card Against FD in India

The table below consists of the top credit cards against the FD:

Note: The table consists of top credit cards against FD based on parameters like quick approval, credit limits and other consumer-friendly benefits.

Features and Benefits of a Credit Card Against FD

A credit card against FD offers a convenient way to access credit while keeping your savings secure. Here are the key benefits:

1. Helps Build Credit Score:

   Using the card responsibly and paying bills on time helps you build or improve your CIBIL score, which strengthens your financial profile.

2. No Income Proof Needed:

   Most banks do not require salary slips, income statements, or high credit scores to issue this card; your FD acts as the security.

3. Easy Approval:

   Ideal for beginners, students, homemakers, or individuals with low/no credit history. Since the card is backed by your FD, approval is simpler and faster than regular credit cards.

4. FD Continues to Earn Interest:

   Even when it is pledged, your Fixed Deposit remains active and continues generating interest, making this a smart dual-benefit option.

5. Credit Limit Linked to FD Value:

   The credit limit is usually up to 80%–90% of your FD amount, offering easy access to funds without breaking the deposit.

6. Rewards and Cashback:

   Many banks offer reward points, cashback, fuel benefits, and merchant offers on eligible spends, helping you save while you spend.

7. Interest-Free Period:

   Just like a regular credit card, you get a grace period to repay dues without interest, provided you clear the full amount by the due date.

8. Convert Purchases into EMIs:

   Higher-value purchases can often be converted into EMIs, allowing you to manage payments comfortably.

Eligibility Criteria – Who Can Apply for a Credit Card Against an FD?

Below is the eligibility criteria for the credit card against the FD:

• Available only to individual resident account holders.
• The applicant must hold a regular Fixed Deposit (FD) with the same bank.
• The FD should not be a tax-saving FD.
• The FD must meet the bank’s minimum deposit amount requirement
• The FD should allow the bank to mark a lien
• The FD should ideally have a minimum tenure (generally 6–12 months, depending on the bank).

Wrapping Up

Choosing a credit card against FD can be a smart way get quick and easy access to credit at the time of a need. Besides, using the card responsibly you can build and improve your credit score. All of these while keeping your savings unaffected and growing. By ensuring timely repayments and low credit use, you can improve your CIBIL score and get access to better financial products in the future.