Credit Card Against FD

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What is a Credit Card Against FD 

A credit card against FD is a type of secured card that you can opt for if you have a fixed deposit with the bank or the entity issuing the credit card. When you opt for this kind of a card, your linked FD serves as collateral for the credit card. Different banks have different limits for fixed deposits that qualify for FD-based credit cards. And the amount in your FD directly affects the credit limit on your credit card. The higher the FD amount, the higher the credit limit. 

 

A credit card against fixed deposit is an attractive solution to enjoy the benefits of a credit card when you are unable to meet the eligibility requirements for an unsecured credit card. Such a card also helps to build or improve your credit score.

How to Apply for a Credit Card Against FD

The procedure to apply for a credit card against FD varies from one bank to another. Generally, you need to take the following steps to get your FD-based credit card.

If you already have an FD with the bank

  • Step 1: In this case, visit the bank’s website. 

  • Step 2: Head to the credit cards section and find the credit card offered against existing FDs. 

  • Step 3: Fill in the personal details and other details required on the website.

  • Step 4: Submit your credit card application form along with any documents that may be required.

  • Step 5: The bank will then review the application and send you the card if your application is approved.

If you do not have an FD with the bank

  • Step 1: In this case, you need to first open a fixed deposit account with the bank. 

  • Step 2: Once your FD is opened, visit the bank’s website and choose the FD-based credit card.

  • Step 3: Fill in the details required in the credit card application form. 

  • Step 4: Submit the form along with the paperwork needed.

  • Step 5: Once your application is reviewed and approved, the fixed deposit credit card will be sent to your address. 

To find the best credit card against FD, you can turn to popular banks such as Axis Bank, ICICI Bank, State Bank of India, etc. Some of these banks also let you get instant credit cards against fixed deposits. The amount of deposit required to qualify for this facility, however, may vary from card to card.

 

Visit the Bajaj Markets website or app to check out some of the top credit cards from these renowned banks. You can then compare your options by studying the features and charges. After you have made up your mind, you can apply for the best credit card against FD from the platform itself. So, don’t wait any longer and get yourself a credit card today!

How Does a Secured Credit Card Work?

Secured credit cards are issued against a security such as a fixed deposit. Opening an FD and acquiring a credit card against it means that you don’t need to submit any proof of income which is typically required to apply for a credit card. 

 

In case of an FD-secured credit card, if default does occur, the bank has the right to withdraw the fixed deposit to secure the amount owed to it by the holder of the deposit. The bank is obligated to inform the FD holder about taking action to break the deposit through all possible channels of communication. 

 

Most credit cards secured by fixed deposits, however, come with conditions that can allow you to remove the credit card’s dependence on your fixed deposit. If you use your credit card responsibly for a duration agreed upon by you and your bank, your credit card will be delinked from your fixed deposit.

 

You can ensure responsible use of your credit card by using it actively and consistently, within your spending credit limits, and pay off your monthly dues at time.

Features and Benefits of FD Based Credit Cards 

The exact features of a credit card on FD vary slightly from one bank to another. Here is a closer look at some of the most common features and benefits of such secured credit cards. 

 

  • The credit card limit depends on the FD amount (usually between 80-90%) 

  • A credit card against FD helps build your credit score if you pay your dues promptly

  • The charges for getting a credit card on FD are usually negligible 

  • The interest rate on such secured credit cards is lower than that on unsecured credit cards

  • If you are an existing fixed deposit holder with the bank/financial institution, there is minimal to zero paperwork needed to get your FD-based credit card

  • You also earn rewards points when you use your FD-based credit card

Eligibility Criteria for an FD Credit Card   

The eligibility criteria for getting a credit card against FD may vary from bank to bank. Some entities issue such cards only if you open a fixed deposit with the bank and hold the same as collateral. Others may simply need you to have a minimum amount as FD to apply for a credit card. However, if your fixed deposit is already marked as collateral against an overdraft or a loan, you cannot use the same to get a fixed deposit credit card.

Documents Required for Credit Card Against Fixed Deposit 

In case you already have a fixed deposit with the bank or the financial institution from which you are planning to get an FD-based credit card, you may not be required to submit any documents when you apply for the card. Instead, the bank will simply verify your existing documents.

 

However, in case you are applying for a new instant credit card on FD, you will be asked to submit the following documents.

 

  • Proof of identity like your PAN, Aadhaar card, voter’s ID, driver’s license or passport

  • Proof of residence like your Aadhaar card, voter’s ID, driver’s license, passport or utility bill

  • Proof of income like your payslips, bank statements or income tax returns 

List of Banks Offering Credit Cards Against Fixed Deposit

Credit cards against fixed deposits are an extremely useful payment instrument across banks. However, only a small selection of banks actually offer this variety of credit cards. These include:

 

  • Central Bank of India

  • Axis Bank

  • Bank of Baroda

  • Kotak Mahindra Bank

  • State Bank of India

FAQs About Credit Card Against FD

  • ✔️Which bank gives credit cards against FD?

    Axis Bank, HDFC Bank, State Bank of India, etc., offer some of the best FD credit card variants. The minimum amount of money you need to have as a fixed deposit may vary from card to card.

  • ✔️How does FD act as collateral to avail a secured credit card?

    When you take a credit card against your FD, it is a secured credit card. In case you default in making your credit card payment in time, the bank/ financial institution can recover the outstanding amount from your FD.

  • ✔️Can I use my Credit Card against FD to withdraw cash at ATMs?

    Yes, just like other credit cards, you can withdraw cash at an ATM using your FD credit card. The withdrawal can be up to your credit limit.

  • ✔️Is it good to take a credit card against FD?

    A credit card against a fixed deposit is a good option if you do not have income proof or do not have a very high credit score. It is an easy-to-acquire credit card that offers quite a few benefits. However, you need to remember that when you apply for a credit card on FD, the FD amount gets locked for the entire tenure, as the amount acts as a collateral.

  • ✔️Does a credit card against FD increase your CIBIL score?

    Yes, a credit card on FD can help you increase your CIBIL score, provided you pay all the outstanding dues on time. In case of any delayed payments, your credit score will be adversely affected.

  • ✔️What are the disadvantages of secured credit cards?

    If you are applying for an FD secured credit card, you must have the required minimum deposit in your bank account for the FD. This amount is locked by the bank for the complete duration of the fixed deposit. In case you fail to make your credit card payments, your fixed deposit may be broken by the bank, aside from deterioration of your credit score.

  • ✔️What is the minimum fixed deposit amount required to get a credit card?

    The minimum amount required to get a secured credit card varies from one issuing bank to another. While some banks may issue credit cards against a fixed deposit of ₹10,000, others may demand a deposit of ₹25,000 or more.

  • ✔️Does the FD credit card limit increase?

    Yes, it is possible to increase the credit card limit of your fixed deposit. You can do so by adding more funds to your FD as the funds in your FD correspond with your credit card limit.