When you aim to build a perfect credit profile getting a credit card against FD seems to be a great resort. Available against collateral, this credit card is easy to get, enabling you to improve your credit score and helping you get easy approval for future credit options.
Moreover, the eligibility criteria for getting a secured credit card are simpler than regular credit cards. All you must have is an FD, and the credit card provider does not stress over your income stream, previous repayment record, etc. So, read on to learn more about it.
What is a Secured Credit Card?
A secured credit card interprets the same meaning as a credit card against FD. When a bank or NBFC is a credit card issuer, and you are already maintaining an FD account with them, then you may apply for a secured credit card.
To become eligible for this facility, you must deposit a pre-determined minimum amount while starting the FD. This varies from one financial institution to another. Many banks offer a 100% withdrawal limit for this type of credit card when you open an FD either by visiting their branch or via net banking.
Did You Know?
The first ever bank credit card in India was launched by the Central Bank of India back in 1980. It was a Visa card, and any interested individual needed to present a minimum annual income range to possess the card.
How Does a Secured Credit Card Work?
The fundamental concept of an FD based credit card is very simple. Once you have opened an FD account with a credit card issuer, you may request them to provide a personal credit card against your fixed deposit.
When you agree to present your security deposit to garner a credit card, the lender can break your FD if you default on timely repayments. However, this will be the last resort assumed by your credit provider, and they will try to reach you via all possible channels to notify you about such repercussions.
As a responsible borrower, if you repay the monthly bills on time and maintain a consistent spending pattern, a fixed deposit credit card can help you maintain a healthy credit score.
Features of Credit Card against FD
Here we have listed some of the most popular features of an FD based credit card:
Affordable FD amount
Banks these days offer a credit card on FD to customers maintaining a security deposit of even less than ₹20,000. For instance, if you intend to apply for a Kotak FD credit card, you will be held eligible with a minimum fixed deposit amount of ₹15,000. Hence, these cards are increasingly affordable.
Sufficient credit limit
You may get up to 85% of your FD amount as the credit card limit. However, you must check the bank policies before applying for exact details.
These cards allow you to explore various rewards like cashback, travel points, movie ticket discounts, etc., just like a regular credit card.
Usually, a credit card against FD comes with an interest-free period of up to 55 days. Again these particulars must be checked before applying.
Word to Remember
Interest-free: This term is commonly used to describe credit facilities that come with no additional interest payments. Lenders often extend this benefit to borrowers while they are serving the introductory period.
Best Credit Cards Against Fixed Deposits in India for 2023
Let us take a look at some of the highly affordable fixed deposit credit cards in India:
|Minimum FD Amount
|Bajaj Finserv RBL Bank Freedom SuperCard
|₹999 + GST
|SBI Card Unnati
|₹499 + GST
|ICICI Bank Instant Platinum Credit Card
|Bank of Baroda Prime Credit Card
|Axis Bank MY ZONE EASY Credit Card
|₹500 + GST
How to Get a Credit Card against FD?
The application process of FD based credit card is pretty straightforward and has been discussed below:
Step 1: Suppose you wish to possess an SBI credit card against FD, but until now, you do not have any fixed deposit with SBI. In that case, you must visit the nearest branch to activate the fixed deposit account first.
Step 2: Verify the minimum FD balance for a secured credit card facility. Then wait for your account to get activated. After this, you may apply for a credit card account against this security deposit online or offline.
Step 3: Contrarily, when you already have an FD with your preferred credit card issuer, you just need to forward an online request by visiting their official website.
Banks Providing Credit Cards against FD
In the following list, you can find some of the top-rated banks in India offering a credit card against FD:
- HDFC credit card
- Axis Bank credit card
- ICICI Bank credit card
- SBI credit card
- Yes Bank credit card
- Kotak Mahindra Bank credit card
- Andhra Bank credit card
Eligibility Criteria to Apply for a Credit Card Against FD
There are no such eligibility criteria set in terms of minimum salary or annual income for individuals looking to gather a fixed deposit credit card. However, they must fall within a certain age bracket that the credit card issuer specifies.
For instance, if you intend to apply for an HDFC credit card against FD, your minimum age has to be 18 years. The maximum age limit, in this case, has been set as 70 years.
Documents Required to Apply for a Secured Credit Card
A credit card against FD is vastly popular because it requires minimal documentation. No ID proof documents are asked for as the card issuer already has access to your personal and banking details by virtue of a previously-opened FD account. However, a few financial institutions tend to cross-verify the address and other details to avoid confusion later on.
There are many benefits of issuing a credit card against FD. It allows for strengthening your credit history, especially when you are just starting off in your career. Most importantly, you get easier access to several advanced credit lines as the lenders gain confidence witnessing your financial stability.
Credit Card against Fixed Deposit: FAQs
You experience many advantages when you choose to borrow a credit card on FD. The biggest of them is that you can invest in an FD and simultaneously leverage the perks being offered by your credit provider. You are generally offered better FD rates against your deposits as compared to regular FD account holders.
Yes, many banks approve their customers’ requests to increase their FD credit card limit. However, before validating the request, the banking officials will review the customers’ credit score, repayment history and current income.
This factor is subjective to your preferred lender. Different lending institutions have set different benchmarks regarding the minimum FD amount. For instance, if you plan to apply for an SBI credit card on FD, the minimum should be ₹25,000.
Depending on your credit history and several other factors, HDFC can offer you a secure credit card against an FD amount ranging from as low as ₹10,000 to ₹20,000. Generally, most lenders fix 75% – 85% of an applicant’s FD amount to be their credit card’s upper limit.
Yes. You can apply for FD via internet banking.