May 21, 2025 · 12 mins read
Santosh Kumar
Credit cards are among the most widely used financial instruments in the contemporary financial industry. They provide flexibility, ease of use, and the opportunity to establish credit. However, it might be challenging for those with little or no credit history to be accepted for a conventional credit card. FD-backed credit cards are useful in this situation. These secured credit cards provide a safer way for people to build or raise their credit score since they are provided against a fixed deposit (FD) that acts as collateral. The idea is straightforward: while the FD continues to accrue interest, the applicant can use the credit card as usual, and the credit limit is often a proportion of the FD.
The main advantage of an FD-backed credit card is that it offers a great chance for those with bad credit or no credit history to obtain a credit card. Users may establish a solid credit history by using the card sensibly and paying on time. In addition to the advantage of establishing credit, the finest FD-backed credit card may offer rewards, cashback, and discounts on a range of goods and services.
A secured credit card provided by financial institutions secured by the applicant's fixed deposit with the bank is known as an FD-backed credit card. By serving as collateral to secure the credit card, the fixed deposit lowers the bank's risk. The card's credit limit is often expressed as a percentage of the FD. However, this can differ from bank to bank. A bank may, for instance, provide a credit limit of up to 90% of the FD amount. Since the FD still accrues interest, it's a comparatively low-risk choice for people who want a credit card but can't get an unsecured one because of their short credit history.
An FD-backed credit card is a straightforward and efficient approach for a lot of people to get started with credit. An FD-backed credit card provides a safe and dependable approach to establishing your credit record, regardless of your status as a student, stay-at-home mom, or new borrower. For people who want to raise their credit score but can't get standard credit cards, a best FD-backed credit card is perfect. Cardholders may greatly increase their creditworthiness by using their cards regularly and responsibly, which includes paying their bills on time and keeping their credit usage ratio low. An FD-backed credit card can, therefore, be a first step toward wider access to financial goods and financial independence.
The ability to establish credit history and raise credit score is one of the main benefits of utilizing an FD-backed credit card. Using such a card might be a great approach for those who have no credit history to begin building a credit profile. This aids in building a good credit history, which is essential for future applications for unsecured credit cards, mortgages, and loans.
Making all of your payments on time is crucial when using a credit card that is guaranteed by the Federal Reserve. Making late payments might harm your credit score and negate the benefit of using the card to raise your credit score. Users may demonstrate responsible financial conduct and improve their credit score by routinely paying off their credit card debt and avoiding high credit use. Additionally, many financial institutions give frequent credit reports to assist in tracking progress and confirming that the payments are being recorded appropriately, which further motivates consumers to keep on top of their financial responsibilities.
Because the best FD-backed credit card alternatives usually enable users to spend up to a certain amount, they make it simpler to manage debt and establish a positive credit history. People who want to repair their credit after experiencing financial hardships or making bad credit choices in the past may also benefit from it. Because of the fixed deposit's security, the bank will have a way to get its money back even if the cardholder defaults. Nonetheless, this is a great chance for consumers to raise their credit score over time and obtain better financial products, provided that the payments are handled properly.
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The fd-backed credit card is a desirable choice for people who want to establish or repair their credit history since it has a number of benefits. The simplicity of acceptance is one of the main advantages. Since the credit is secured against the FD, FD-backed credit cards are easier to get than unsecured credit cards, which demand a strong credit score and financial background. This can be a useful tool for those who have little or no credit history in order to obtain a credit card.
The fact that the FD still earns income despite being pledged as security is another important advantage of FD-backed credit cards. As a result, the cardholder continues to profit from the FD and does not miss out on its advantages. Another option for financial freedom is a credit card that is backed by the Federal Reserve. The cardholder may access the credit limit that the card offers, but they are unable to access the FD directly. Additionally, responsible card use guarantees that the card will raise the cardholder's credit score, which will open up more favorable financial options down the road.
To be qualified for an FD-backed credit card, candidates by and large must meet the taking after requirements:
1: Be at least 18 years old.
2: Hold a Fixed deposit (FD) with the issuing bank.
3: Meet the bank’s least FD sum, which regularly decides the credit limit on the card.
4: Submit standard Know Your Client (KYC) archives, counting confirmation of personality, address, salary, and points of interest of the settled deposit.
Applying for an FD-backed credit card is a straightforward online process:
1: Open a Fixed deposit – If not as of now done, begin by opening an FD with the bank.
2: Fill Out the Application – Total the credit card application and yield the vital documents.
3: Bank Audit – The bank will evaluate your FD and dole out a credit limit based on the store amount.
4: Card Issuance – Once affirmed, the credit card is issued and prepared for use.
Since these cards are secured by the FD, banks are by and large more tolerant with endorsements. Be that as it may, the FD must stay untouched for the length the card is dynamic. Utilize the card capably to guarantee your FD remains a secure and useful venture.
FD-backed credit cards offer a credit limit that’s specifically connected to the esteem of your Fixed deposit. Regularly, the credit limit ranges from 75% to 90% of the FD sum. A few banks may offer up to 100% of the store as the credit limit, particularly for high-value FDs or long-term connections with the bank.
For example, if you put an FD of ₹1,00,000, your credit limit seems to be ₹75,000 to ₹90,000. This setup guarantees that your investing capacity is supported by your possess stores, decreasing the chance for the bank and expanding your chances of approval—especially if you don’t meet the criteria for unsecured credit cards.
What’s more, the FD remains untouched as long as the card is dynamic. If you default on installments, the bank can recoup contributions from the FD. So, whereas the credit limit is adaptable and fulfilling, dependable utilization is still fundamental to dodge losing the deposit.
Absolutely. One of the greatest benefits of FD-backed credit cards is their capacity to Help you Build or revamp your credit profile. Since these cards report to credit bureaus fairly like normal credit cards, opportune reimbursements and moo credit utilization can boost your CIBIL score or other credit appraisals over time.
They’re perfect for:
1: First-time clients with no credit history.
2: Students or specialists who need pay proof.
3: Individuals attempting to recuperate from a destitute credit record.
By utilizing the card wisely—paying your charge on time, maintaining a strategic distance from full utilization, and keeping the card active—you make a positive credit path. Over 6–12 months, numerous clients see a noteworthy advancement in their scores, which can open entryways to unsecured credit cards, individual advances, and superior intrigued rates in the future.
In brief, an FD-backed card isn’t fair a stopgap—it’s a stepping stone to a more grounded financial profile.
FD Minimum Credit Card Amount: ₹10,000
Credit Limit: FD value in full
Important attributes:
1: Free card for life
2: 4X reward points for each purchase
3: There is no FX markup on foreign transactions.
4: 100% cash withdrawal of FD value for a maximum of 45 days without interest
5: Interest rates on the fixed deposit can reach 7.25% annually.
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FD Amount Minimum: ₹15,000.
Credit Limit: 85% of the FD amount maximum
Important attributes:
1: Simple acceptance without proof of income
2: Points are awarded for qualified transactions.
3: Options for flexible repayments with SmartEMI
4: FD keeps making interest.
FD Amount Minimum: ₹50,000
Credit Limit: 85% of the FD amount maximum
Important attributes:
1: No yearly or joining costs
2: BookMyShow discounts
3: ICICI Bank Culinary Treats Program dining deals
4: Points that may be redeemed in a variety of categories
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FD Amount Minimum: ₹20,000
Maximum Credit Limit: 80% of the FD amount
Important attributes:
1: Immediate approval
2: 50 days of interest-free credit
3: No yearly or joining costs
4: Withdrawals of cash up to the whole credit limit
FD Amount Minimum: ₹25,000
Maximum Credit Limit: 80% of the FD amount
Important attributes:
1: For the first four years, there is no yearly charge.
2: One reward point for every 100 naira spent
3: Waiver of fuel surcharge
4: Transfer of balance on EMI options
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It's essential to consider several aspects when selecting an FD-backed credit card to ensure you're getting the most flexibility and value from your financial commitment. Examine the fixed deposit requirement first, since different banks have different minimum requirements, which might affect accessibility, particularly for students or first-time users. The best FD-backed credit card will retain transparency, offer low costs, and give competitive rates that make credit development reasonable. Next, pay attention to the interest rates, annual fees, and hidden charges. Additionally, you may select the finest FD-backed credit card that supports your credit journey and makes daily transactions more convenient and cost-effective by weighing rewards, advantages, and lifestyle perks like cashback, gasoline waivers, and dining discounts.
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If you're looking to Build or repair your credit score with negligible risk, an FD-backed credit card is one of the most intelligent instruments accessible. It gives you the investing control of a credit card whereas utilizing your Fixed deposit as security. Whether you're just beginning your credit travel or bouncing back from past money related stumbles, this sort of card offers a secure, available way to demonstrate your creditworthiness—without requiring salary confirmation or a tall credit score. Ready to take control of your financial future? Open a Fixed deposit through Zet and apply for an FD-backed credit card in minutes. It’s quick, simple, and an effective step toward way better credit and more brilliant cash propensities.
Yes, as an FD-backed credit card is issued against your fixed deposit, you can apply for one even if you don't have a job or a salary. The greatest FD-backed credit cards with low income requirements are available from several institutions.
Of course. Even if your fixed deposit is connected to a credit card, the Federal Reserve guarantees, it still earns interest as usual. In part because of this, it is regarded as the greatest FD-backed credit card choice for novices.
You can ask for a larger credit limit on your FD-backed credit card by raising the amount in your fixed deposit. Several banks that provide the best credit cards guaranteed by the Federal Reserve also permit periodic limit reviews.
Yes, you may raise your credit score by using your FD-backed credit card responsibly, which includes making on-time payments and keeping your credit usage low. Because of this, it is frequently referred to as the greatest FD-backed credit card for credit development.
No, your FD is locked until you cancel or give up your FD-backed credit card. Certain banks permit early closure, but only after all outstanding balances on the finest FD-backed credit card have been paid off.
Depending on the network, most major banks' FD-backed credit card alternatives (Visa, MasterCard) are available for use abroad. When selecting the finest credit card with FD backing, look for this attribute.
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