Credit Card against Fixed Deposit

Learn how to get credit card against fixed deposit.
Credit Card against FD
3 min

Minimum monthly income and a good credit score are prerequisites when applying for a new credit card. This can make it challenging for students, homemakers, and freelancers with a low (or no) credit score to apply for one. Secured credit cards against FDs provide a practical solution, allowing depositors to leverage their investments as collateral to access credit.

Also read: Common mistakes to avoid while investing in FDs

What is a credit card against a fixed deposit?

A credit card against an FD is a type of secured credit that can be availed by pledging your fixed deposit account as collateral. Different banks have different eligibility parameters for FD-backed credit cards, including age, minimum deposit, and minimum tenure requirements. The pre-approved credit limit on your card will be a certain portion of your FD corpus. In other words, the higher your FD corpus, the higher your credit limit will be.

How does a secured credit card work?

When you apply for a credit card against your FD account, your FD funds serve as a security deposit for the card. In the event of payment defaults, the card issuer can get a claim over your FD account. Pledging your FD corpus as collateral helps reduce the credit risk for the lender. As a result, secured FD-backed credit cards generally come with lower interest rates than regular cards.

Additionally, obtaining credit by pledging FDs as collateral helps avoid inquiries into your credit score. So, if you need urgent credit without high interests or hard inquiries, this might be the right time to invest in a fixed deposit. The bank sanctions a credit limit based on the value of your FD funds, generally ranging from 75%-90%[1] . These cards function like regular credit cards, where you use the predetermined limit to make purchases and transactions and then repay the amount by the due date to avoid interest penalties.

If you are planning to invest in fixed deposit, then you can consider Bajaj Finance Fixed Deposit. They hold top tier AAA rating and offer one of the highest interest rate of up to 8.85% p.a.

Features of credit cards against fixed deposit

  • Flexible credit limit: The credit limit offered on such accounts depends on your FD corpus. Some banks offer up to 90% of the deposit amount as the credit limit on your card.
  • Minimum documentation: Banks require KYC documents while opening FDs. In other words, you are not required to submit additional documents when applying for a credit card against your FD.
  • Rewards: Functioning like any other credit card, FD-backed cards extend reward points across purchase categories, cashback offers, and exclusive discounts.
  • Nominal to zero joining fees: Most fixed deposit credit cards are offered with a joining/annual fee. Even those with annual charges cap them at a minimal level and offer waivers on meeting certain spending thresholds.
  • Minimum amount and tenure: Banks fix a minimum FD investment amount, generally varying from Rs. 10,000 to Rs. 50,000. The minimum tenure of the FD account you plan to offer as security should be at least 6 months or 180 days.

Eligibility to apply for credit cards against fixed deposit

FD-backed credit cards are only issued to resident individuals. The following types of depositors do not qualify for this facility:

  • Hindu Unified Families (HUFs)
  • Minors (below the age of 18 years)
  • Foreign nationals
  • Trusts
  • Societies
  • Partnership firms
  • NRI fixed deposit holders.

Note: Eligibility criteria vary among financial institutions.

Additionally, the minimum deposit requirement varies among financial institution. Typically, it ranges from Rs. 10,000 to Rs. 25,000. Banks also have certain age parameters applicants must meet to avail of a fixed deposit credit card. While the minimum age limit for FD credit cards varies depending on the lender’s policies, they are typically available to applicants between 18 and 65 years of age.

Also read: How repo rate impacts FD rates

How to apply for a credit card against a fixed deposit

The process of applying for credit card against an FD account is quite simple. Here is a step-by-step guide to the process:

  1. Eligibility check: Most financial institution offering credit cards against FDs have specific requirements. Ensure you meet the minimum FD amount, credit score, and income criteria.
  2. Choose the financial institution: Compare financial institution offering this service. Focus on credit limits, interest rates, rewards programs, and fees.
  3. Application: Contact your financial institution or visit a branch. Fill out the application form and provide necessary documents.
  4. FD lien: The financial institution will place a lien on your FD for the credit limit sanctioned. You will continue to earn interest on the FD.
  5. Card issuance: Once approved, you will receive your credit card, usually within a few working days.

Benefits of having a credit card against fixed deposit

  • Easy application and approval: Applying for a fixed deposit credit card is quick and easy. You do not have to submit additional documentation or endure lengthy approval processes.
  • No income proof needed: No income proof is required for such secured credit cards. This makes them perfect for those with a limited or no credit history.
  • Helps build credit history: Timely repayment of dues helps you build a good credit history and credit score, making it easier to apply for other loan products like personal loans, home loans, two-wheeler loans, etc.
  • Low interest rates: Generally, credit cards issued against FDs have a lower interest rate than unsecured credit cards.


Credit card against fixed deposit are excellent credit products for those who have just started earning and have no credit history. These secured cards allow you to continue earning FD interest on your corpus while enjoying credit card rewards, easy liquidity, and building a credit history.

If you do not like borrowed credit, even if it is secured, opt for a high-yield non-cumulative FD. You can consider the Bajaj Finance FD since it offers high interest rates of up to 8.85% p.a. With flexible payout frequencies, non-cumulative Bajaj Finance FDs bring you easy liquidity with interest compromises.

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Frequently asked questions

Can I deposit money using a credit card?

This depends on the lender’s policies. Several commercial banks allow you to deposit money using a credit card via their net banking platforms.

Am I allowed to use my credit card against a fixed deposit for withdrawing cash at an ATM?

Yes, you can use an FD-backed credit card to withdraw funds at an ATM.


As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.