When it comes to being risk-averse, a fixed deposit is undoubtedly one of the most secure modes of investment. Apart from helping you save your hard-earned money, it also lets you earn a higher rate of interest than on savings deposits while providing the flexibility of tenure. However, that is not all! You can also use your fixed deposit to apply for a credit card.
Your linked FD can serve as collateral and be used to recover the outstanding balance if you miss paying your credit card bill. A credit card against fixed deposit is an attractive solution for availing 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.
Already have an FD with the Bank
In this case, you simply need to visit your bank branch and apply for a credit card against your existing FD. If your bank allows, you can easily apply for a credit card against FD online by visiting the website or mobile application.
Don’t Have an FD
In case you do not have an FD yet, you need to first open a Fixed Deposit account. Some banks allow their customers the provision of opening an FD online, for the others you may have to physically visit the branch office.
Once your FD account is active, you can apply for the best credit card against FD by filling in the paperwork.
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 sum of money, 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 portal itself. So, quit waiting and get yourself the long-pending credit card today!
The eligibility criteria for getting a credit card against FD may vary from bank to bank. Some banks 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 credit card. However, if your fixed deposit is already marked as collateral against an overdraft or loan, you cannot use the same to get a fixed deposit credit card.
In case you already have a fixed deposit with the financial institute or the bank you may not be required to submit any documents when you apply for a credit card on FD. Your existing documents will be verified.
In case you are applying for a new instant credit card on FD, you will be asked to submit:
Proof of Residence
Proof of Income
Getting a credit card on FD has several advantages. These include:
Credit card limit depends on the FD amount (usually between 80-90%) and is not decided by the bank
There are many banks that provide a credit card with INR 10,000 as the minimum FD for Credit Card
Helps build a credit score
Charges for getting a credit card on FD are little, or none
Interest rate is lower than unsecured credit cards
If you are an existing fixed deposit holder with the bank/ financial institute there is minimal to zero paperwork needed
The credit card application does not require an income proof
Fixed deposit continues to earn interest till maturity
You will be able to earn points/ rewards when you use your FD based credit card
Let us take a look at the banks that offer Fixed Deposit Credit Card. The table also shows the amount of Fixed Deposit required to apply for an FD based Credit Card:
Name of the Bank |
Minimum FD Amount for Credit Card |
Bank of Baroda |
INR 15,000 |
ICICI Bank |
INR 10,000 |
Kotak Mahindra Bank |
INR 10,000 |
Axis Bank |
INR 10,000 |
A credit card against FD can be applied for by anyone who is willing to deposit a sum of money with the bank. However, it is especially useful for those who:
Are unable to secure a credit card
Do not have a regular source of income
Have a low income
Have a poor or no credit history
Do not have proof of income
A credit card against a fixed deposit, as the name suggests, is a card that is issued against a bank fixed deposit. The card functions independently of your FD; however, if you miss paying your credit card bill, your linked FD will work as collateral and be used to recover the outstanding balance. Such a credit card is ideal for people who are unable to meet the eligibility requirements for an unsecured credit card. It also helps to build or improve your credit score.
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.
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.
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.
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 take a credit card on FD, the FD amount gets locked for the entire tenure, as the amount acts as a collateral.
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