Opting for a credit card in lieu of fixed deposits (FDs) is a better option for those who cannot get a credit card due to reasons like low credit score, low income, etc. Through FDs, not only can you get guaranteed returns, but you can also benefit from a secured credit card. Let’s explore how to obtain a credit card against FD. Fixed deposit investment is one of the most popular options in India. Apart from this, you can also opt for a credit card against FD. With this credit card, you can build or improve your credit score.

A secured credit card against fixed deposit (FD) is a financial product offered by banks like SBI and SBM Bank (India). The special thing about this credit card is that your FD acts as collateral and you keep getting interest on it. One thing to note is that the credit limit of this credit card is generally around 80% to 90% of the FD amount.

If a customer is unable to pay his monthly credit card bill, the bank can use the FD amount to settle the outstanding amount. The fees and charges associated with secured credit cards obtained against FDs are often lower than unsecured credit cards, and these credit cards are relatively easy to get approved.

In India, banks issue credit cards against fixed deposits only to Indian residents. The following individuals are not eligible to avail of this facility:

Hindu Undivided Families (HUF)

Minors (below 18 years of age)

Foreign nationals

Third-party firms

Partnership firms

Trusts

Societies

Tax saver fixed deposit customers

NRI fixed deposit customers

Additionally, credit cards against fixed deposits are not issued to those fixed deposits that are already pledged (i.e., fixed deposits against which a loan/overdraft has been taken).

Individuals with low income.

People with poor credit history or low credit scores.

Those with irregular income streams.

Individuals without income proof.

Households seeking financial flexibility.

Individuals who have recently started working.

The benefits of obtaining a credit card against a fixed deposit are particularly significant for customers with poor credit history or irregular income. Acquiring a credit card can be challenging for these individuals due to the risk banks face regarding potential non-performing assets (NPAs).

In such cases, customers who already have a fixed deposit can leverage it to obtain a credit card. By using their existing fixed deposit as collateral, they mitigate the risk for the bank, making it easier for them to secure a credit card despite their credit history or income irregularities.

Following are some of the highlights of such credit cards:

-Credit limit is not decided by the bank but depends on the fixed deposit amount of the customer.

-Since the card is a deposit protected one, fees are low or zero at some banks

-Lower interest rates than unsecured credit cards

-No income proof required

-No cumbersome paperwork required

Credit Card Name = Minimum Fixed Deposit Amount

Step Up                          – ₹2,000

SBI Unnati                      – ₹ 25,000

ICICI Instant Platinum     – ₹ 20,000

Assure Card                   – ₹ 25,000

Insta Easy Credit Card   – ₹ 20,000

 -Credit Limit (100% of FD amount)

-No joining face (₹200 for ₹2,000)

-6.50% interest on fixed deposits

-Helps in building credit score / building credit score

-A completely digital application process

-100% pre-owned

-No charges for first 4 years

-₹ 499 annual fee is charged from the 5th year onwards

-Rewards etc. per ₹ 100 spent

-1% surcharge waived on fuel purchases up to ₹ 500 – ₹ 3000

can be used worldwide

-2 PAYBACK POINTS for every ₹100 spent

-internationally recognized

-No joining or annual fees

-Credit Limit – 80% of fixed deposit amount

-Cash withdrawal limit is up to 100%

 – Surcharge waived on fuel purchases up to ₹ 400 – ₹ 5000

-Annual fee waiver of ₹ 500 (on expenditure of ₹ 6,000 in the first year and ₹ 35,000 in the subsequent year)

-Interest free credit up to 50 days from date of purchase

-In-built personal accident death cover

-Fixed Deposit available as credit limit up to 80% of deposit amount

-Cash withdrawal up to 100% of credit limit

-Up to 50-days interest-free credit (in case of no outstanding balance)

-1% surcharge waiver on fuel purchase

-15% discount at partner restaurants in India

Answer: There are many banks that offer credit cards against fixed deposits. Some of these are being explained below:-

-SBI Unnati Credit Card

-Kotak Mahindra Bank Aqua Gold Credit Card

-ICICI Instant Platinum Credit Card

-Axis Bank Insta Easy Credit Card

-Bank of Baroda Assure Credit Card

Answer: Unsecured credit cards are issued without any collateral/security. Such credit cards carry higher fees and are offered only to those who meet the eligibility criteria of the respective bank.

To get an unsecured credit card, it is very important that you have a regular source of income and a good CIBIL score. On the other hand, the credit card taken against FD is a secured credit card because in it your fixed deposit is kept as collateral/security. You can apply for this credit card even with low or no CIBIL score or income proof. At the same time, even if the customer commits a default, the bank has the option to pay the missed or delayed payments through FD.

Answer: No, banks do not provide this facility to citizens living abroad.

Answer: Generally, banks provide up to 80% of the fixed deposit amount as credit limit.

Answer: Yes, most banks provide cash withdrawal facility through ATM. The limit on secured credit cards issued against FD is usually 80%-90% of the FD amount.

Answer: Yes, if you take a credit card in lieu of FD then you do not need to submit income proof.

Answer: The minimum FD amount for a secured credit card varies from bank to bank.

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