Credit Card Against FD: How It Works, Benefits & How to Apply?

SUMMARY 

This guide explains what a credit card against FD is, how it works, and how it compares with a regular credit card. It covers eligibility, documents and fees so you can decide in under five minutes whether this secured card suits your needs. 

A credit card against FD is a secured credit card issued against the amount held in your fixed deposit account, rather than your income or credit history. The bank places a lien on the FD, meaning you cannot withdraw it while the card stays active, but the deposit keeps earning interest as usual. Your credit limit is set as a percentage of the FD amount, typically 75-85%, so a larger deposit gets you a higher limit. This structure makes the card genuinely useful for students, first-time earners, freelancers or anyone with a thin or damaged credit file, since most banks skip the income-proof and CIBIL score checks that apply to unsecured cards. It works like any other credit card for spends, EMIs and bill payments, and responsible use can help you build a credit history over time. If you are wondering whether this route makes sense for you, the sections below cover exactly how it works, what it costs and how to apply. 

QUICK STAT 

[RBI – flag for review] Under RBI’s updated card issuance framework effective 2025, card issuers must report credit card account activity to credit bureaus every 15 days, so timely repayment on a secured card against FD can reflect in your credit score faster than before.  (Source: RBI (Commercial Banks – Credit Cards and Debit Cards: Issuance and Conduct) Directions, 2025) 

What is a Credit Card Against FD? 

A credit card against FD works on the simple idea of collateral. Instead of assessing your income slips or credit score, the bank looks at the fixed deposit you are willing to lock in. Many lenders market this as an instant credit card against FD because, once the FD is opened, the card itself can be issued within a few days, sometimes on the same day at select bank branches. Because the FD itself acts as security, most banks do not insist on a CIBIL score at all, which is precisely why this card works well for people building credit from scratch. That said, a few banks may still do a basic background check, so eligibility can vary slightly across lenders. 

How Does a Credit Card Against Fixed Deposit Work? 

Getting an instant credit card against fixed deposit is a straightforward, five-step process: 

1. Open a fixed deposit with a bank that offers FD-linked cards, usually starting from ₹10,000-25,000. 

2. The bank marks a lien on the FD, locking it as collateral while the card is active; you keep earning FD interest throughout. 

3. Your credit limit is set at roughly 75-85% of the FD amount. 

4. Once the FD and lien are confirmed, most banks courier the card within 3-7 working days; some digital-first banks issue it instantly online. 

5. Spend and repay like any regular credit card – on-time payments help build your credit score. 

The credit limit on a credit card against FD is not fixed system-wide. It depends entirely on your deposit amount and the specific bank’s policy, but 75-85% of the FD value is the norm across most Indian banks. So if you deposit ₹2,00,000, expect a limit somewhere between ₹1,50,000 and ₹1,70,000, revisable only if you increase the FD amount. 

PRO TIP 

A longer FD tenure does not increase your credit limit, but it does mean your card stays active for longer without needing renewal. Match your FD tenure to how long you actually want the card, not just for a better interest rate. 

Credit Card Against FD vs Regular Credit Card: Key Differences 

A secured credit card against fixed deposit and a regular, unsecured credit card serve the same purpose but differ in how they are approved and backed: 

Factor	Credit Card Against FD	Regular Credit Card
Approval basis	FD amount (collateral)	Income and CIBIL score
CIBIL score needed	Usually not mandatory	Typically 750+
Credit limit	75-85% of FD value	Based on income and repayment history
Income proof	Not required	Required
Best suited for	New-to-credit or thin-file applicants	Applicants with an established credit history
Funds locked	Yes, FD stays under lien	No collateral involved

Because the FD is pledged as security, you cannot break or withdraw it while the card remains active without consequences. 

WATCH OUT 

If you close or prematurely break an FD that is linked to a credit card, the bank will usually cancel the card immediately and adjust any outstanding dues against the deposit before releasing the remaining balance to you. 

Eligibility and Documents Required for Credit Card Against FD 

Here’s what you typically need to know before you apply – this is essentially how to get a credit card against FD without running into surprises. 

• Minimum age of 18 years (21+ for some private banks) 

• Indian resident or NRI, depending on the bank’s policy 

• An active or newly-opened fixed deposit with the same bank 

• Minimum FD amount, usually starting from ₹10,000-25,000 

• PAN card as mandatory KYC 

Documents required typically include: 

• PAN card 

• Aadhaar card or another valid address proof 

• Passport-size photograph 

• FD receipt or account statement 

• Duly filled card application form 

Annual fees on a credit card against FD vary by bank and card variant. Several banks waive the joining and annual fee entirely for FD-linked cards, while others charge a nominal fee of around ₹500-1,000, sometimes reversed if you cross a minimum annual spend. Always check the specific card’s fee schedule before opening the FD, since this can influence which bank you choose. 

DID YOU KNOW? 

Consider Ananya, a 24-year-old freelance designer in Pune with no credit history. She opens a ₹1,50,000 FD, gets a credit limit of ₹1,20,000 (80% of her FD), and spends about ₹15,000 a month on subscriptions and work software. Paying in full every month for a year helps her build a healthy credit score and later qualify for an unsecured card on her income alone. 

Benefits of a Credit Card Against FD 

• No income proof or salary slips needed 

• Works well with no or low CIBIL score 

• Builds credit history for future unsecured cards or loans 

• FD keeps earning interest even while pledged 

• Often comes with standard credit card perks: reward points, cashback, EMI conversion 

Risks and Things to Watch Out For 

• Funds remain locked for as long as the card is active 

• Premature FD closure can trigger card cancellation 

• Credit limit is capped by your deposit, unlike unsecured cards that can grow with income 

• Interest on unpaid dues applies exactly as on regular credit cards, so overspending is still costly 

Looking to open a fixed deposit to get started? Compare rates from multiple partner banks and NBFCs on the Fibe app and pick the FD that fits your goals – Explore Fibe Fixed Deposits. 

FAQs On Credit Card Against FD 

1.  What is a credit card against a fixed deposit? 

It is a secured credit card issued against your FD, where the bank places a lien on the deposit and sets your credit limit as a percentage of its value. 

2.  Can I get a credit card against FD without a CIBIL score? 

Yes, in most cases. Because the FD acts as collateral, banks generally do not require a CIBIL score, though a few may still run a basic check. 

3.  What is the credit limit on a credit card against FD? 

It is usually 75-85% of your FD amount, so a larger deposit unlocks a proportionally higher limit. 

4.  Can I break my FD if it is linked to a credit card? 

Not without consequences. Breaking the FD typically leads to the card being cancelled and any outstanding dues being settled against the deposit. 

5.  Is there an annual fee for a credit card against FD? 

It depends on the bank. Many waive the fee entirely for FD-linked cards, while others charge a nominal amount, often refundable on hitting a spend threshold. 

6.  I already have an FD. Can I convert it into a credit card without opening a new one? 

In several cases, yes, provided your existing FD meets the bank’s minimum amount and tenure criteria for a secured card. Check with your bank branch or app. 

7.  What happens to my credit card against FD if the deposit matures? 

Most banks prompt you to renew or link a new FD before maturity. If you let the FD lapse without renewal, the card is usually deactivated once the lien is released.