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Low Credit Score? Credit Cards against FD can help

credit card against FD

Having multiple credit cards have become more or less like a status symbol. Flaunting too many credit cards in a wallet have become akin to flaunting a new luxury purchase.  

A credit card comes with a free credit period of around 50 days. The offers and cashback increase the attraction quotient of credit cards.However, getting the credit card of your dreams is no child’s play. A low credit score can lead to the rejection of the application. Not just a low credit score, you can also struggle to get a credit card if you don’t have enough credit history.

Don’t lose heart yet, as you can easily apply for a credit card against your fixed deposit. A credit card against FD is known as a secured credit card.

Features of Credit cards against Fixed Deposits

While there are hardly any differences between the working of the two credit cards, they have slight differences in their features.

Here are some of the features of credit cards taken against FD: 

  • The interest rate on these credit cards are lower than the interest rate on unsecured credit cards
  • The credit limit of the card is a percentage of the amount in the fixed deposit. Typically, the credit limit is around 85% of the FD amount. In the case of unsecured credit card, the credit limit depends on monthly salary and credit score.
  • These credit cards can be availed without submitting any income proof.
  • Customers can get these credit cards faster than regular credit card as the process requires less documentation as the customer is already a bank customer. The bank has identification and address proofs of the customer which hastens the process.    
  • If the customer does not pay the dues and defaults, the bank can settle your dues from the linked fixed deposits.

Advantages of a credit card against FD

Credit card against Fixed Deposits is a boon for individuals with a bad credit score. Banks and other financial institutions must check the credit score of the applicant before issuing any debt product such as credit card or loans. These credit cards make it possible for such individuals to get the benefits of a credit card.  

The credit card helps to improve low credit scores. By taking a credit card and paying the dues on time, customers can improve their credit score. A higher credit score will help them in processing their application of future loans and credit cards.    

These credit cards come with a lower interest rate than regular credit cards as these cards are secured credit cards. The interest rate charged after the due date may be almost 50% less than the interest charged on non-secured credit cards.

How to apply for Credit cards against FD 

Applying for credit cards against fixed deposits is extremely easy. However, the application process will differ from a person who already has fixed deposits in the bank to the person who does not have an FD.   

For non-FD accountholders

To apply for a credit card against FD, the customer has to apply for a fixed deposit with the bank. You may have to visit the bank branch and fill the application to apply for fixed deposits.

If you have a savings account with the bank, you can easily open a fixed deposit through online banking or net banking. The amount will be transferred from the savings account to the fixed deposits.

You can apply for a secured credit card after the fixed deposits are complete.

For FD account holders:

If you already have fixed deposits with the bank, you can easily apply for a secured credit card online.

Limitations of Credit cards against FD

After you apply for a secured credit card, the FD linked with your credit card is no longer liquid. This means that you won’t be able to redeem before the maturity date.

If you are not able to pay your dues on time, the bank takes over the linked fixed deposit.

Not only that but it also adversely impacts the credit score.


Credit Cards against FD may make it easier to avail a credit card. However, you need to keep in mind that you won’t be able to redeem from the FD and if you don’t pay your dues on time, it may result in poorer credit score.


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