Credit Cards Against Fixed Deposit (FD)

When you open a fixed deposit (FD) and apply for a credit card against it, the FD serves as security for the card, eliminating the need for income proof in most cases. Since the deposit acts as collateral, the bank or card issuer can recover outstanding dues by liquidating the FD in the event of a payment default. Credit cards backed by fixed deposits—also known as secured credit cards—are offered by many Indian banks and function much like regular credit cards, with a predefined credit limit linked to the FD amount. These cards are especially suitable for individuals with low or no credit history and offer a reliable alternative when eligibility for unsecured credit cards is limited.

Features of a Credit Card against Fixed Deposit

The features of credit card against fixed deposit are mentioned below: 

1. Affordable FD amount - The minimum fixed deposit amount usually ranges from Rs.10,000 to Rs.20,000 and is hence affordable.
2. Credit limit - Credit limit offered on secured credit cards typically depends on the fixed deposit amount. Generally, banks offer 75% to 85% of the deposit amount as total credit limit on the card.
3. Minimum documentation - To apply for secured credit cards, you do not need to submit a lot of documents.
4. Minimum tenure - The minimum tenure of the fixed deposit that you are giving as security to the bank should be six months.
5. Interest free period - Generally, banks offer an interest free period of 48 days to 55 days on secured credit cards.
6. Rewards - These cards offer multiple rewards such as reward points, cashback, etc., to the customers.
7. Interest on fixed deposit - Cardholders will continue earning interest on their fixed deposit.

Benefits of Having a Credit Card Against Fixed Deposit

Having a secured credit card provides the following benefits –

1. No income proof required: Have a credit card without any income proof. This is helpful for students, senior citizens, home makers, freelance workers, etc.
2. Helps to build credit history: Having a credit history has become a norm to avail any credit-related products. Having a secured credit card and using it properly would allow you to build a good credit history.
3. Access to other credit lines: Once you have credit history and the associated credit score, you do not find any problem in applying for other loan products including personal loan, home loan, auto loan, etc. Thus, secured cards introduce you to the world of credit.
4. Quick approval: Ensures instant approval of credit card application on booking an FD. 

Who Should Apply for a Credit Card Against a Fixed Deposit?

From our experience as financial analysts, a secured credit card isn't for everyone. It's a specialized tool designed to help specific individuals enter the credit ecosystem. This card is most beneficial for those who face barriers to getting a traditional unsecured credit card.

Here is the ideal candidate profile:

1. Individuals with a Low or No Credit Score

If you have a poor credit history or are just starting, getting approval for a regular credit card is challenging. An FD-backed card is one of the most effective ways to build or rebuild your credit score. Since the card is secured by your deposit, banks are far more likely to approve your application.

2. Applicants with Insufficient or No Regular Income

Secured cards are an excellent solution for individuals without a consistent income stream, such as students, freelancers, gig workers, or self-employed professionals. Because the FD guarantees repayment, banks often waive the stringent salary requirements needed for unsecured cards.

3. Persons Residing in or Working for Blacklisted Locations/Employers

In some cases, lenders may deny applications based on your residential address or because your employer is on an internal "blacklist." A secured credit card can help you bypass these restrictions, as the bank's risk is fully covered by your fixed deposit.

Top Credit Cards Against Fixed Deposits

Compare the amount of Fixed Deposit required to apply for the secured credit cards or the credit cards against FD among the below top banks in the India in 2025.

How to Apply for a Credit Card Against Fixed Deposit

1. For non-FD account holders: If you wish to apply for a secured credit card, you need to have a fixed deposit account with the respective bank.

1. Create an FD either by visiting the bank or by online procedure. 

1. Fill in a form to apply for the credit card against FD. 

1. Submit the required KYC (Know Your Customer) documents, such as address and identity proof. 

1. Review your application form and submit it to complete the application procedure and wait for approval. 

Note: reach out to the preferred bank by either visiting physically or via bank website, as some bank allows paperless application 

1. For FD account holders: If you already have a fixed deposit account with the bank from which you would like to avail the secured credit card, you can simply apply online by visiting the bank’s website.

Key Factors to Consider Before Getting a Secured Credit Card

While an FD-backed card is a great entry point into the world of credit, there are several critical trade-offs to be aware of.

1. Minimum Fixed Deposit (FD) Amount

Most banks require a minimum deposit to issue a secured card. While this amount can be as low as ₹2,000, it varies from one institution to another. A higher FD can sometimes grant you access to cards with better benefits, so it's wise to compare offers.

2. Your Credit Limit is Tied to the FD

A common misconception is that your credit limit will equal your FD amount. In reality, banks typically offer a credit limit that is a percentage of your FD, usually between 75% to 90%. For example, on a ₹50,000 FD, your credit limit might be around ₹40,000. This is generally lower than what you might get with an unsecured card, but it’s a necessary safeguard for the lender.

3. Your Fixed Deposit Funds are Locked

This is a crucial point many first-timers overlook. The money you put in the fixed deposit is completely blocked for as long as you hold the credit card. You cannot withdraw it for emergencies. You only regain access to these funds after you have settled all outstanding dues and formally closed your credit card account.

4. The Serious Risk of Default

What happens if you miss your payments? The consequences are direct and immediate. The bank has the right to liquidate your fixed deposit to recover the amount you owe. Not only will you lose your principal deposit, but you could also forfeit any interest accrued over the period. This action will also be reported to credit bureaus, damaging the credit score you were trying to build.

5. Watch Out for Hidden Charges

"Secured" doesn't mean "free." These cards often come with the same fees as unsecured cards. Before signing, you must read the terms and conditions carefully and look for:

1. Annual Maintenance Charges (AMC)
2. Late Payment Penalties
3. Interest Charges on revolving balances
4. GST applied to all fees and charges

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