Credit Card

Benefits of Credit Cards Against Fixed Deposits

Benefits of Credit Cards Against Fixed Deposits

Credit Cards have gained worldwide popularity for their ability to provide instant credit, making transactions more convenient and negating the need to carry physical currency.

Despite their advantages, only some qualify for these cards due to income constraints or poor credit scores. This is where secured Credit Cards against Fixed Deposits step in as saviours.

This article explores the merits of such cards, shedding light on how they offer a viable solution by leveraging existing Fixed Deposits.

So, let’s jump into the benefits of Credit Cards against Fixed Deposits.

Credit cards fixed deposits

What is a Credit Card against Fixed Deposit?

A Credit Card against Fixed Deposits is a financial arrangement where a bank issues a credit card to an individual against a Fixed Deposit they hold with the bank. The card’s credit limit is typically a percentage of the Fixed Deposit amount.

This is a secure option for individuals with limited credit history or low income, allowing them to access credit while the Fixed Deposit acts as collateral.

Benefits of Credit Cards Against Fixed Deposits

Credit Cards linked to Fixed Deposits offer several advantages that make them a practical choice for individuals seeking credit options.

Here are a few benefits of using Credit Cards against Fixed Deposits:

Easy Approval

Secured kotak 811 Credit Card, linked to Fixed Deposits, are easier to get, even if your credit history isn’t great. You put money in a Fixed Deposit as security. These cards help you build or improve your credit. Your payment habits are reported to credit agencies, boosting your credit score. 

They might offer a higher spending limit than regular cards. It’s like a lesson in handling money well: you spend within your limit and pay on time. Just in case, they’re also a backup for urgent expenses.

Credit Building

Using these cards responsibly helps build or improve credit scores. Using the card and paying your bills promptly shows you can manage credit well.

This good behaviour gets reported to credit agencies, boosting your credit history. This is useful when you want loans or other financial services in the future, as lending institutions check your credit score to decide if you’re trustworthy in repaying them.

Higher Credit Limit

Credit Cards linked to Fixed Deposits often give you a higher spending limit than regular secured cards. You can spend more using the card. Best of all, you don’t need a significant income to qualify. 

Your Fixed Deposit acts like a promise that you’ll pay back the money you spend. If you’re a student or someone with little income, these cards can help you manage your expenses without worries.

No Income Requirement

These Credit Cards don’t demand a high salary or regular income. They’re a good option for students, retirees, or people with fluctuating earnings. How? Because the Fixed Deposit assures the bank that you can pay it back. 

So, you’re not excluded just because you earn less. It’s like having a card that trusts your savings rather than your monthly paycheck.

Interest on Fixed Deposit

You don’t need a big salary with Credit Cards tied to Fixed Deposits. This helps students, retirees, and those with irregular incomes.

Your Fixed Deposit acts like a safety net, so the bank doesn’t worry much about how much you earn. This differs from Credit Cards that require income verification.

Therefore, you can have a credit card with a Fixed Deposit even if you don’t make much. It’s like borrowing with savings as collateral.

Eligibility Criteria for a Credit Card against an FD

Different banks have different rules to decide who can get a credit card based on your desire.

Here are some key factors they consider when granting credit:

  • Minimum Age: Usually 18 or 21 years, depending on the bank.
  • Fixed Deposit Account: You need an existing FD account with the bank.
  • FD Amount: The FD amount often determines the credit limit.
  • Nationality: Indian citizens and sometimes Non-Resident Indians (NRIs).
  • Credit Score: Some banks may consider credit score, but it’s less stringent.
  • Income: This is not a major factor due to the secured nature of the card.
  • Documentation: KYC documents, FD receipt, and application form.

Remember that specific criteria can vary between banks, so it’s best to check with the bank offering the credit card for precise eligibility details. 

In essence, Credit Cards against Fixed Deposits extend credit opportunities to a broader audience by focusing more on the Fixed Deposit and less on stringent income and credit score criteria.


The advantages of utilising Credit Cards against Fixed Deposits are evident. Credit Cards offer immediate access to funds, payment flexibility, and a chance to build a credit history. They also provide rewards, cashback, and insurance benefits.

On the other hand, Fixed Deposits offer security and guaranteed returns. Depending on one’s financial goals and risk tolerance, the choice between these options should be made wisely to maximise personal financial growth and security.

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