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Credit Cards against Fixed Deposit – Features and Benefits

A Rudimentary Understanding

With the economy peering into borderline recession, most of us have been laying out our financial options before us and have begun wondering what measures we should take to stabilize our financial situation. With the passage of time, more individuals have actively begun researching credit cards against fixed deposits (FDs). 

To understand what is a credit card against FD, it is imperative to understand the definition of a secured credit card. Secured credit cards are issued to individuals after the submission of some collateral such as a fixed security deposit. They are mostly offered to those individuals who have a bad history with credit card affairs. 

To determine this bad history, timely credit card bill payments, default on loans and misconduct with other extant credit cards are looked into. A credit card against FD basically refers to a secured credit card being obtained after linkage to your FD. These cards are easily issued, and any fees charged as a result of the ownership of this card are lower in comparison to those charged on unsecured credit cards.

 A huge pro of possessing such a card is that in case you forget to make your credit card bill payment on time, the bank can easily redeem the amount by taking it directly from your account balance. Now that the basics are covered, we elucidate below the main features and benefits of holding such an account.


Rewards: Just like a normal credit card, credit cards against FDs provide their customers with rewards such as cashback, reward points, and discounts.

Tenure: Credit card against FD granters expect you to pledge an FD that holds a minimum tenure of 6 months.

Credit limit: The credit limit of a credit card against FD is usually 75% to 85% of the fixed deposit amount you provide. This is also considered an advantage to procure such a card.

Documentation: The documents required to process an application for such a card is minuscule, and almost always, an individual is provided with such a card almost instantly after application.

Interest: After obtaining a credit card against FD, you will still continue to earn interest on your FD. Another interest-related point to be remembered is that banks habitually offer an interest-free period to their credit card against FD customers for a duration between 48 and 55 days.

Feasibility: It is quite convenient to own cards of this ilk because of the ease in procuring them. In addition to low documentation requirements and speed processing applications, the FD amount that is pledged is also quite low. From a range between Rs. 10,000 and Rs. 20,000, you can get approved for a decent credit card against FD.

Benefits Of Credit Card Against FD

The credit card against FD has been labeled by some consumers as being the best card to apply for, because of a myriad of benefits that escort it. It can be deduced from just reading the features above that these kinds of credit cards are worth the investment, especially if you possess a bad history with credit card dealings. 

With minimal documentation and speedy processing durations, you not only initiate your credit card venture sooner but also due to the low credit limit (75% to 85% of your fixed deposit amount), you can initiate building a good credit score almost immediately. In turn, when your income augments, you can transition to utilizing conventional credit cards with their competitive terms and accelerated reward structures. 

To boost up your credit score, any interest charged will be significantly low compared to unsecured credit cards. Furthermore, income proof is not required to initiate your credit card attainment process. Overall, these credit cards pave the way for to you improving your credit reputation while holding onto a larger number of advantages than any disadvantages.

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