In today’s financial world, a credit card is not just a convenience it’s a gateway to better money management, credit building, and emergency support. However, not everyone can qualify for a regular credit card, especially students, homemakers, freelancers, or those without a stable income. That’s where the concept of a credit card against FD (Fixed Deposit) becomes a game-changer.
This type of credit card allows you to enjoy the benefits of a regular credit card while using your fixed deposit as collateral. If you’ve been looking for ways to access credit without income proof, or if you’re trying to build a credit score from scratch, this is a practical and safe option to consider.
What Is a Credit Card Against FD?
A credit card against FD is a secured credit card issued by banks against the amount you hold in a fixed deposit. Unlike regular cards that require income proof, credit history, or a salary slip, this type of card is backed by the deposit you make. The bank uses your FD as a security in case you default on your payments.
For example, if you open a fixed deposit of ₹20,000, the bank may issue you a credit card with a limit of up to 90% of the FD amount, i.e., ₹18,000. This card works exactly like a standard credit card you can use it for online shopping, bill payments, travel bookings, and much more.
Why Choose a Credit Card Against FD?
There are multiple reasons why this kind of card can be a smart financial move:
- No Income Proof Needed
Since your credit card is backed by your FD, banks don’t typically ask for income documents. This is ideal for students, self-employed individuals, or people between jobs.
- Easier Approval
Because the credit risk is low for the bank (your FD covers any missed payments), approval rates for these cards are higher—even if you have a poor or no credit history.
- Great for Building Credit Score
A secured credit card lets you start or repair your credit score. If you consistently pay your bills on time, your credit profile improves, opening doors to better loan offers in the future.
- Earn Interest While Spending
Your FD continues to earn interest as usual. So, you’re not just accessing credit—you’re also growing your money on the side.
- Controlled Spending
Because your credit limit is tied to your FD, you’re less likely to overspend or fall into a debt trap. It teaches responsible credit usage.
How to Apply for a Credit Card Against FD
Applying is usually a simple, quick process. Most banks allow you to apply online or by visiting a nearby branch. Here’s what it generally looks like:
- Open a Fixed Deposit – Choose an amount you’re comfortable with. Most banks require a minimum of ₹10,000–₹20,000 for FD-backed cards.
- Select the Card Option – While opening the FD, opt for a secured credit card linked to it.
- Submit Basic Documents – KYC documents like Aadhaar, PAN, and address proof are required.
- Card Issuance – Once processed, you receive your credit card, often within a few days.
For instance, Kotak811 offers an option where users can open a digital FD and apply for a credit card against it, without any income documentation—making it perfect for young or first-time users.
Who Should Consider This Option?
A credit card against FD is not just for those who don’t qualify for a regular credit card. It’s also a solid financial tool for:
- Students looking to start their credit journey early
- Salaried individuals wanting to build a higher credit score
- Self-employed or freelancers without fixed monthly income
- Anyone with a low credit score needing to rebuild their profile
- Cautious spenders wanting the benefits of a credit card without overspending
If you fall into any of these categories, this is a low-risk, high-benefit solution to gain access to credit responsibly.
Things to Keep in Mind
While this option has numerous benefits, there are a few things to watch out for:
- FD Lock-in Period: Your money is locked in the FD for the chosen duration. You can’t withdraw it without affecting your credit card.
- Late Payment Charges: Just like regular cards, missing due dates will lead to penalties and could hurt your credit score.
- Credit Limit: Your spending capacity is limited by the amount you keep in your FD. Choose the deposit amount wisely based on your needs.
- Card Closure: If you wish to close the FD, the card will be deactivated unless you clear all dues or switch to an unsecured card.
Final Thoughts
Getting a credit card against FD is a smart, flexible, and low-risk way to enter the world of credit. It combines the safety of fixed deposits with the convenience of modern credit cards. Especially for those who face challenges getting approved for unsecured cards, this method offers a reliable alternative to start building or improving credit.
As digital banking continues to evolve, many platforms now offer a completely online journey from opening your FD to receiving a secured credit card. Whether you’re new to credit or simply looking for a more controlled financial tool, this might just be the solution you’ve been searching for.
