Credit Card Against FD: Key Benefits and Best Picks for 2025

Whenever you face a financial pinch, your credit card can provide much-needed support. This may include cashless transactions, emergency funding, reward benefits, and the convenience of a ‘buy now and pay later’ feature. However, not everyone qualifies for credit cards, especially those with low credit scores or no credit history, as banks typically use to assess applicants' creditworthiness based on their credit history. This is where credit cards against fixed deposits come into play, serving as a lifesaver for those who fail to meet the criteria for traditional credit cards. Let’s scroll down to learn more about the fixed deposit credit cards. This all-in-one guide will explain what a credit card on FD is, its expected features, the application process, expert tips, and more.

Credit Cards Against Fixed Deposits Explained

A credit card against FD is a type of secured credit card. Unlike regular unsecured credit cards, these cards require you to pledge a fixed deposit as collateral. The credit limit is typically a percentage of the FD amount, ensuring the bank is protected against default. It particularly benefits individuals with low or no credit scores, enabling them to build or improve their credit history. Moreover, this type of credit card offers all the convenience and benefits associated with a regular credit card. This ultimately makes FD-based credit cards an ideal option for many people who might otherwise struggle to obtain one due to their poor credit history.

How Secured Credit Cards Function?

Secured credit cards function similarly to regular credit cards but with a few key differences. When you apply for a fixed deposit credit card, the bank uses your fixed deposit as security. And if you fail to pay your credit card bill, the bank can recover the amount from your FD. This significantly reduces the bank’s risk, making it easier for individuals with low or no credit scores to obtain a credit card.

Key Features of Credit Cards Against Fixed Deposits

Have a close look at the applicable features of a credit card against FD:

• Secured Credit: These cards are secured against your fixed deposit, reducing the risk for the lender.
• Credit Limit: Typically, the credit limit is a percentage of the fixed deposit amount, often up to 85-90%.
• Easy Approval: Approval for these cards is easier, especially for those with poor or no credit history.
• Minimal Documentation: The application process requires minimal documentation since the fixed deposit serves as collateral.
• Interest Earnings: You continue to earn interest on your fixed deposit even while it is pledged to the credit card.
• Eligibility for All: These cards are accessible to students, homemakers, and those with low or no income.

Top Credit Cards Against Fixed Deposits in India

Is It Good to Have a Credit Card Against Fixed Deposits?

Having a credit card against an FD can be highly beneficial. It provides credit access for those who might not qualify for a regular credit card. It further helps you build or improve your credit score, which can be advantageous for future financial needs. Moreover, the benefits and rewards associated with these cards are similar to those of unsecured credit cards. It is also essential to use the card responsibly to avoid high interest rates and potential penalties.

Eligibility Criteria for Credit Cards Against Fixed Deposits

You generally need to meet the following criteria to be eligible for a credit card against FD:

• Age Limit: You need to be at least 18 years old, while some banks may require a minimum age of 21.

• Fixed Deposit Account: You must have an existing FD account or be willing to open one with the issuing bank.

• Minimum FD Amount: The minimum deposit amount varies by bank, usually ranging from ₹10,000 to ₹30,000.

• FD Tenure: The fixed deposit should have a minimum tenure of 6 months.

• Residential Status: You must be an Indian resident, although some banks may accept NRIs with a valid Indian residential address.

Steps to Apply for Credit Cards Against Fixed Deposits

Below are the steps you must follow regarding an FD credit card application:

• Open a Fixed Deposit: Open a fixed deposit account with the bank from which you want to obtain the credit card.

• Check Eligibility: Ensure you meet the bank’s eligibility criteria for a secured credit card. This usually includes factors like age, minimum FD amount, and the tenure of the fixed deposit.

• Apply Online or Offline: Online applications are typically more convenient and faster, while offline applications may provide more personalised assistance.

• Submit Documents: Provide the necessary documents with your application. These may include identity proof, address proof, and details of your fixed deposit.

• Approval and Issuance: Once your application is reviewed and approved, the bank will issue the credit card.

Required Documents for Credit Cards Against Fixed Deposits

You typically need to submit the following documents to apply for a fixed-deposit credit card:

• Identity Proof: Aadhaar card, passport, voter ID, or driving license.

• Address Proof: Utility bills, passport, aadhaar card, or rental agreement.

• PAN Card: Your Permanent Account Number (PAN) card is usually required.

• Fixed Deposit Certificate: The certificate or receipt of your fixed deposit.

• Photographs: Recent passport-sized photographs.

Benefits of Credit Cards Against Fixed Deposits

Let’s examine the expected benefits of a credit card against FD:

• Rewards Programs: You can earn points, cash back, or miles on every purchase, unlike fixed deposits, which offer only fixed interest.

• Interest-Free Period: Enjoy up to 50 days of interest-free credit, allowing you to manage cash flow effectively.

• Buy Now, Pay Later: Make purchases now and pay for them later, offering greater financial flexibility.

• Emergency Fund Access: Provides access to emergency funds without breaking the fixed deposit, providing greater financial flexibility.

• Convenience: Easy to use for online and offline transactions, providing greater accessibility than fixed deposits.

• Building Credit History: Regular use and timely payments improve your credit score, unlike fixed deposits.

• Low Annual Fees: Many banks offer FD-based credit cards with low or no annual fees, making them a cost-effective option.
• Lower Interest Rates: Interest rates on these cards are usually lower compared to unsecured credit cards.