Updated on: Sep 21st, 2023 | 8 min read
A credit card is a highly preferred payment option because along with around more than 30 days of interest-free credit, it allows you to make cashless purchases online and offline. Most credit cards offered by banks promise several other perks like cashback and rewards, which add to their popularity. However, being a credit instrument, a credit card is not usually issued to all individuals. Similar to the process of availing a loan, credit card eligibility is subject to the applicant’s occupation, gross income, credit score, etc..
However, if your credit card application has been rejected previously, you still have a chance to get a credit card. Those who do not have a steady income or are new to credit can get access to a credit card using an FD account.
This article aims to answer all your questions on how to get a credit card against a fixed deposit, the eligibility criteria, features, and the banks that offer them.
A credit card against FD is a secured credit card that banks offer against your fixed deposit account. Similar to FD loans, you can pledge your fixed deposit as collateral and obtain a credit card against FD. It means that if borrowers do not pay their credit card bills, banks have the right to recover the outstanding balance from their fixed deposit account.
One of the most significant advantages of a secured credit card is that it is available to most individuals regardless of their credit score, income, or occupation. However, eligibility criteria vary from bank to bank.
Generally, banks offer credit cards based on parameters such as the applicant’s credit score and gross income. These credit cards are also called unsecured credit cards since they are not backed by any collateral. FD credit cards are ideal for those with no credit history or low credit scores looking to improve their credit profile.
Depending on the bank, you can avail of a credit card on a minimum fixed deposit of Rs. 10,000. Credit limits typically range from 75% to 85% of the FD value. Therefore, investing a higher amount in a fixed deposit will enable you to have a higher credit card limit. Almost all prominent banks in India offer credit cards against fixed deposits.
Take a look at the key features of a credit card against FD:
The eligibility criteria may vary from bank to bank, however here are a few essential factors to consider:
Here are the details of credit cards against FD offered by a few prominent banks in India:
|Bank||Name of the Credit Card||Minimum FD Amount||Key Features|
|State Bank of India||SBI Unnati Credit Card||Rs.25,000|
Free for the first four yearsThe annual charge is Rs. 499 from the fifth year1 reward point for every Rs.100 spent1% fuel surcharge waiver (on transactions between Rs. 500 – Rs. 3,000)Worldwide acceptanceAdd-on cards for the family
|ICICI Bank||ICICI Bank Instant Platinum Credit Card||Rs.20,000||No joining or annual feeWorldwide accessibility2 payback points for every Rs.100 spentDining offers through the ICICI Bank Culinary Treats Programme|
|Bank of Baroda||Bank of Baroda Prime Credit Card||Rs 15,000||1% cashback on all spends1% fuel surcharge waived for all fuel transactions between 400 – 5,000 Zero first year and annual fees Free Add-on cards for the family|
|Axis Bank||Axis My Zone Easy Credit Card||Rs 15,000||25% cashback on movie ticketsCash withdrawal up to 100% of the credit limit1% fuel surcharge waiver on transactions between Rs. 400 – Rs. 4,000|
|Central Bank of India||CBI Cent Aspire Credit Card||Rs 20,000||The deposits under the Scheme will attract interest at the prevailing card rate.|
|Kotak Mahindra Bank||811 #DreamDifferent Credit Card Online||Rs.9, 000 (for non-811 saving account customers)Rs. 5,000 (for 811 saving account customers)||No Joining or Annual Fees2 reward points for every Rs.100 spent onlineWaiver on Fuel surcharge and railway booking surchargeYou can withdraw cash up to 90% of your total credit limit.|
|Yes Bank||YES Prosperity Rewards Plus Credit Card||Rs 30,000||8 Reward Points for every Rs 200 spent on travel and dining1% Fuel surcharge waiver at fuel stations across India for transactions between Rs. 400 to Rs. 5,000|
|Union Bank of India||VISA Gold Credit Card||As per the bank’s discretion||Enjoy interest free credit period of 21 to 50 days on your purchases Fuel surcharge will be Reimbursed at 1% of the amount spent on fuel purchase subject to a maximum of 100/- per card per month.Offers on shopping, hotels, car rentals, etc|
Applying for a credit card against FD involves minimal documentation.
Credit cards are likely to remain a preferred mode of payment both online and offline. Moreover, the rewards and cashback offers make them an attractive option. Applying for a secured credit card against a fixed deposit is one of the easiest ways to obtain one. However, it’s imperative to remember that you are pledging a fixed deposit as collateral. Therefore, banks may recover the outstanding balance from your FD account if you fail to pay your credit card bills, which can further damage your credit score.
FD credit cards are an excellent alternative for those who may find it difficult to obtain regular credit cards. An FD credit card serves as a tool to improve your credit score, which is essential to secure loans easily.
What is the limit of an FD credit card?
The credit limit of an FD credit card depends on the fixed deposit amount. A higher FD amount will result in a higher credit card limit. Banks usually offer up to 75% to 85% of the FD amount as the limit.
What is the minimum FD amount required for a credit card?
The minimum FD required for a credit card differs from bank to bank. Typically it ranges from Rs 10,000 to Rs 20,000.
What is the difference between a secured and unsecured credit card?
The term unsecured credit card refers to a regular credit card that banks offer based on the applicant’s gross income, credit history, occupation, and other factors. They are called unsecured credit cards because banks issue them without any collateral. A secured credit card is one that banks provide to people who pledge collateral. This type of credit card is easy to acquire because a fixed deposit serves as collateral.
Can I make withdrawals at ATMs using an FD credit card?
You can withdraw up to 100% of your credit limit from an ATM using an FD credit card. However, this feature may vary across banks.
What are the benefits of an FD Credit Card?
An FD Credit Card allows you to earn interest on your FD while also providing you with credit to meet your needs. A credit card can also assist in improving your credit score.
What happens to my credit card if I close my FD?
The credit card is linked to your FD, if you withdraw your FD, you may first have to cancel your credit card with the bank. Many banks offer FD credit cards linked to auto-renewing fixed deposits since these cards cannot exist without linked fixed deposits.