Credit Card Against Fixed Deposit is a smart option for people who want a credit card but don’t meet the eligibility criteria for a regular one. If you’re new to credit cards, have a low CIBIL score, or don’t have a steady income proof, this type of card can make things much easier. In simple terms, a credit card against FD is issued by keeping your fixed deposit as security with the bank. Because the card is backed by your own money, banks are more willing to approve it even for beginners. You still get to use the card like a normal credit card for shopping, bill payments, and online transactions, while your FD continues to earn interest.
In this blog, we’ll explain what a credit card against fixed deposit is, how it works, its key benefits, charges, and whether it’s the right choice for your financial needs.
A credit card against fixed deposit is a type of secured credit card that is issued by a bank by keeping your FD as security. Instead of checking your income or credit score, the bank uses your fixed deposit as collateral to approve the card.
| Basis | Credit Card Against FD | Regular Unsecured Credit Card |
|---|---|---|
| Risk for the Bank | Low risk, as the fixed deposit acts as collateral | Higher risk, since no collateral is involved |
| Approval Basis | Based on FD amount rather than income or CIBIL score | Based on income level and CIBIL score |
| Approval Ease | Easy approval, suitable for beginners and low credit score users | Approval can be difficult for first-time or low-score applicants |
Since the FD works as collateral, these cards are also called secured credit cards. Your fixed deposit remains with the bank and continues to earn interest while you use the credit card.
The working of a credit card against FD is simple and beginner-friendly. Here’s how the process usually works:
1. Open a Fixed Deposit with the Bank
You first open a fixed deposit with the bank offering an FD-backed credit card. Most banks require a minimum FD amount, which can vary from bank to bank.
2. Apply for a Credit Card Against the FD
Once the FD is created, you apply for a credit card against it. Many banks allow this through internet banking, mobile apps, or a branch visit.
3. Credit Limit Is Linked to the FD Amount
Your credit limit is usually a percentage of your FD value generally around 75% to 90% of the fixed deposit amount.
4. Use the Card Like a Regular Credit Card
You can use the card for online shopping, POS payments, bill payments, and subscriptions, just like a normal credit card.
5. Repay Your Monthly Credit Card Bills
You need to pay your monthly credit card bill on time. If you pay in full, you avoid interest charges and build a positive credit history.
6. FD Remains Locked During Card Usage
Your fixed deposit stays locked as long as the credit card is active. If you fail to repay dues, the bank has the right to recover the amount from the FD.
The credit limit on a credit card against fixed deposit is directly linked to the amount of FD you keep with the bank. In most cases, banks offer a credit limit of 75% to 90% of the FD value. For example, if you open an FD of ₹1,00,000, your credit limit may range between ₹75,000 and ₹90,000.
FD Amount
A higher fixed deposit usually means a higher credit limit. Banks calculate the limit as a percentage of the FD value.
Bank Policy
Each bank has its own internal rules. Some banks offer up to 90% of the FD value, while others keep it lower to reduce risk.
Card Variant
Basic cards usually come with lower limits, while premium or co-branded cards may offer a slightly higher limit against the same FD amount.
Even though the card is backed by a fixed deposit, it works like a regular credit card when it comes to interest and charges.
If you don’t pay the full outstanding amount by the due date, interest is charged on the unpaid balance. This interest rate is usually similar to regular credit cards and can range from around 30% to 42% per annum, depending on the bank and card type.
Some banks offer lifetime-free credit cards against FD, while others may charge a small joining or annual fee. The fee depends on the card variant and bank policy.
If you miss the due date, the bank may apply late payment fees, which increase with the outstanding amount. Late payments can also negatively impact your CIBIL score.
Your fixed deposit continues to earn interest as per FD rates, but this interest is much lower than the interest charged on unpaid credit card dues. This means it’s always better to pay your credit card bill in full and on time, rather than relying on FD interest to offset card charges.
Following is a list of secured credit cards offered by some major banks in India, with important features:
| Bank Name | Credit Card Name | Minimum FD Amount | Key Features |
|---|---|---|---|
| SBM Bank (India) Ltd. | Step UP Credit Card | ₹2,000 | Credit limit up to 90% of FD Lifetime free credit card Nil joining fee for FD above ₹5,000 FD interest rate up to 6.50% p.a. 1 reward point per ₹100 spent Helps build credit score No savings account required Up to 50 days interest-free period |
| State Bank of India | SBI Unnati Credit Card | ₹25,000 | No annual fee for first 4 years 1 reward point per ₹100 spent 1% fuel surcharge waiver (up to ₹100 per cycle) ₹500 cashback on annual spends of ₹50,000 Offers on Amazon, Zomato, MakeMyTrip, Ajio, etc. Balance transfer facility available |
| ICICI Bank | ICICI Instant Platinum Credit Card | ₹50,000 | No joining or annual fee 25% discount up to ₹100 on BookMyShow Dining offers on partner restaurants Redeem reward points on travel, shopping, e-vouchers & more |
| Kotak Mahindra Bank | Kotak 811 #DreamDifferent Credit Card | ₹5,555 (811 account) ₹5,000 (Non-811) |
Lifetime free credit card Credit limit up to 90% of FD Cash withdrawal up to 90% of limit 1% fuel surcharge waiver Up to 48 days interest-free period 500 bonus points on ₹5,000 spend Milestone rewards – ₹750 cashback or 4 PVR tickets |
| IDFC FIRST Bank | IDFC FIRST WOW! Credit Card | ₹10,000 (Residents) ₹25,000 (NRIs) |
Credit limit up to 100% of FD Cash withdrawal up to 100% of FD value FD interest rate up to 7.50% p.a. 20% discount at 1,500+ restaurants Personal accident cover up to ₹2 lakh 1% fuel surcharge waiver Welcome cashback & roadside assistance benefits |
A credit card against fixed deposit comes with several practical benefits, especially for people who find it difficult to get a regular credit card.
Easy Approval Without Income Proof
Since the card is secured against your FD, most banks do not ask for salary slips or income documents. The FD itself is enough to get approval.
Ideal for Low or No Credit Score Users
This type of credit card is perfect for beginners or users with no credit history, as banks focus more on the FD amount than your CIBIL score.
Helps Build or Improve CIBIL Score
Regular usage and on-time repayments are reported to credit bureaus. Over time, this helps you build a strong credit history or improve an existing low score.
Lower Risk for Banks
Because your fixed deposit acts as collateral, the bank’s risk is minimal. This is the main reason approvals are faster and easier.
Access to Basic Card Rewards & Offers
Even though it’s a secured card, you still get benefits like reward points, discounts, cashback offers, and online shopping deals, depending on the card.
The following individuals can get a credit card against a fixed deposit account in India:
Individuals with Low Credit Scores: Those who have a low credit score or no credit history can benefit from this type of card.
New to Credit: Individuals who are new to credit and do not have an established credit history.
Existing FD Holders: Customers who already have an FD with the bank can easily get a credit card against it.
Students and Homemakers: Those who might not have a regular income but have a fixed deposit can apply.
Blacklisted Employees or Residents: Employees of an organization that is blacklisted by the bank can still apply for a credit card if they have an FD in the bank. Similarly, people in an area that is restricted or blacklisted by the bank can apply for a credit card against an FD account in that bank.
This makes a credit card against fixed deposit a reliable stepping stone toward better financial access and stronger credit health.
A credit card against FD and a regular credit card may look similar in usage, but they differ significantly in approval, risk, and flexibility.
A credit card against FD is approved based on the fixed deposit amount kept as security. Income proof and CIBIL score are usually not mandatory.
A regular credit card, on the other hand, is approved based on your income, employment status, and credit score.
In an FD-backed credit card, the credit limit is generally 75%–90% of the FD value.
With a regular credit card, the limit is decided by your income profile and credit history and can be much higher for eligible users.
The risk for the bank is lower in a credit card against FD because the FD acts as collateral, but your flexibility is also limited since the FD remains locked.
Regular credit cards carry higher risk for banks but offer more flexibility, higher limits, and access to premium cards.
Credit cards against FD usually have lower or no annual fees, but rewards and benefits are basic.
Regular credit cards may have higher fees, but they often come with better rewards, cashback, lounge access, and lifestyle benefits.
Both options use a fixed deposit as security, but their purpose and usage are very different.
A credit card against FD is meant for regular spending, online payments, subscriptions, and building a credit score.
An overdraft on FD is designed for short-term cash needs, where you withdraw money directly from your bank account.
With a credit card against FD, interest is charged only if you don’t pay the full bill, and it can be high if dues are carried forward.
In an overdraft on FD, interest is charged only on the amount used and is usually FD rate + 1% to 2%, making it cheaper for short-term borrowing.
Responsible usage of a credit card against FD helps build or improve your CIBIL score.
An overdraft on FD usually does not contribute to credit score improvement, as it is not always reported like a credit card.
Choose a credit card against FD if you want to build credit history, make regular payments, and enjoy card-based offers.
Choose an overdraft on FD if you need quick cash for a short period and want to pay lower interest without worrying about rewards or credit score.
If you fail to repay your credit card dues on time, the bank has certain rights because your fixed deposit is pledged as security.
In case of continued non-payment, the bank can recover the outstanding credit card amount from your FD. This may involve partially or fully breaking the fixed deposit to settle the dues, including interest and penalties.
Even though the card is secured, missed or delayed payments are reported to credit bureaus. This can negatively affect your CIBIL score and make it harder to get unsecured credit cards or loans in the future.
If the bank breaks your FD to recover dues, it is treated as premature FD closure. This may lead to:
Reduced interest earnings
Penalty on premature withdrawal (as per bank policy)
Loss of the credit card once the FD is closed
This is why timely repayment is important, even with an FD-backed credit card.
Many major banks in India offer credit cards against fixed deposits. Below are some popular options along with indicative minimum FD requirements (these may vary by card and bank policy):
| Bank Name | Credit Card Against FD | Minimum FD Amount (Approx.) |
|---|---|---|
| SBI | SBI Unnati / SBI SimplySAVE (FD-backed variants) | ₹25,000 |
| HDFC Bank | HDFC Freedom / MoneyBack (FD-backed options) | ₹10,000 |
| ICICI Bank | ICICI Platinum Chip / Coral (FD-backed) | ₹50,000 |
| Axis Bank | Axis Insta Easy Credit Card | ₹20,000 |
| IDFC First Bank | IDFC First WOW! Credit Card | ₹10,000 |
Note: Minimum FD amount, credit limit percentage, and fees may change based on bank policies and card variants. Always check the latest details on the bank’s official website or branch before applying.
Applying for a credit card against fixed deposit is simple and usually faster than applying for a regular credit card. You can apply either online or by visiting a bank branch.
Log in to the bank’s internet banking or mobile app
Choose the option for credit card against FD or secured credit card
Select or create a fixed deposit for the required amount
Choose the card variant and confirm details
Complete OTP or e-KYC verification
Submit the application
Many banks instantly approve the card once the FD is created.
Visit the nearest bank branch offering FD-backed credit cards
Open a fixed deposit (if you don’t already have one)
Fill out the credit card application form
Submit required documents and sign the FD lien form
Bank processes and approves the card
This method is helpful if you prefer in-person assistance.
Most banks ask for minimal documentation, such as:
Identity proof (Aadhaar, PAN, Passport, or Voter ID)
PAN card (mandatory)
Passport-size photograph (in some cases)
Income proof is usually not required.
Approval is generally quick, often within 1–3 working days. In some banks, the credit card is approved instantly once the FD is linked, and the physical card is delivered within a few days.
Like any financial product, a credit card against FD has its advantages and limitations.
Guaranteed Approval
Since the card is backed by a fixed deposit, approval chances are very high.
Credit Score Improvement
Timely payments help build or improve your CIBIL score over time.
Simple Eligibility
No income proof or high credit score is required, making it beginner-friendly.
FD Remains Locked
Your fixed deposit cannot be freely withdrawn while the credit card is active.
Lower Credit Limit Than Unsecured Cards
The limit is restricted to a percentage of your FD amount.
Limited Premium Benefits
Most FD-backed cards offer basic rewards and fewer lifestyle benefits compared to premium unsecured cards.
This balanced view helps you decide whether a credit card against fixed deposit fits your financial needs.
Ans: There are a number of banks that offer credit cards against fixed deposits. Some of the best credit cards against fixed deposits are mentioned below:
Ans: An unsecured credit card is one that is issued without collateral. Such cards charge high fees and are offered only to those who meet the concerned bank’s eligibility criteria. Also, a good credit score and a regular income source are two vital factors for getting an unsecured credit card.
Whereas a credit card against FD is a secured credit card, i.e. it is a lien marked against a fixed deposit. This FD is maintained in the concerned bank which issues this type of credit card. Factors like low/no credit score or no income proof do not affect such a card’s eligibility criteria.
These cards are easy to acquire and do not charge hefty fees. In case of a default from the card holder’s side, the bank reserves the right to settle missed/late payments by redeeming the lien marked fixed deposit.
Ans: No. Banks do not extend this facility to foreign nationals.
Ans: Generally, banks provide up to 80% of the fixed deposit amount as the credit limit.
Ans: Yes. Most of the banks allow ATM withdrawals. Credit cards against fixed deposits are secured credit cards issued against the Fixed Deposit of an applicant. The credit limit on these cards is usually 80%-90% of the FD amount.
Ans: Yes. If you have a fixed deposit and your bank gives a credit card against it, you can go ahead and get a credit card against FD.
No income proof? Apply for Step UP Credit Card, here.
Ans: The minimum fixed deposit amount for a secured credit card varies from one bank to another. SBM Bank (India) Ltd. with Paisabazaar as co-branded partner offers a Credit card against FD (Step UP Credit Card) with a minimum deposit amount of Rs. 2,000.
Credit cards against FDs can be a great option for you if you may not be eligible for a traditional credit card due to low credit scores or lack of income proof. They offer several advantages, such as lower interest rates, the ability to earn interest on your fixed deposit while using it, and improving your credit score. Plus, they’re backed by a safe investment choice, which makes them a no-risk option. And the best part is that you can use your fixed deposit for spending while it continues to earn interest!
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