October 13, 2025 · 9 mins read
Santosh Kumar
While taking a credit card, keeping a fixed deposit (FD) as a guarantee, is a very common and popular method to obtain a credit line. This is offered by most financial institutions and banks in India. This type of credit card is called an "FD-backed credit card" or "credit card against FD". While this can be useful for anyone, it can be especially helpful for first-time users of credit cards, without a credit history, or for students with low or no income and a poor credit history. This article will explain how an FD-backed credit card can be obtained, the criteria to get it, the process, details about the credit limit, tips, and finally, FAQs.
The meaning of an FD-backed credit card is a card that can be issued against a fixed deposit that is already held with the bank or financial institution that will issue the credit card. For this type of credit card, the fixed deposit works as a guarantee for the credit card, instead of an income source or credit history. The fixed deposit amount determines the credit limit. Typically, the credit limit of such a credit card is equal to the fixed deposit or a significant percentage of it. If there is a payment default, the bank can recover the due payment from the FD.
1: People with no or low credit history (such as recent graduates, students, or someone who has never taken a loan or never owned a credit card).
2: People with a low credit score.
3: Consumers who want an easy way to build or rebuild a credit history.
4: People who do not want to pay a security deposit for a credit card
5: Users who do not want a big credit limit and are happy with a smaller credit limit.
A typical limit for an FD-backed credit card can be up to 100% of the fixed deposit amount, or for some banks, it could be 75-90 %. The tenure of the FD and lien or the condition of the credit card could be the same. Sometimes this time is about 12 months and can be renewed.
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1: The first step is to open a fixed deposit (FD) with the bank or financial institution to create a security lien. The amount of the fixed deposit can determine the limit of the credit line. The limit can be up to 90% of the fixed deposit.
2: Every fixed deposit will continue to accumulate some interest, but the fixed deposit will work as a lien on the credit card.
3: But the lien is removed when the card is closed, and the fixed deposit is also released at the same time.
1: You need a bank account with a fixed deposit. A minimum FD amount as set by the bank is required to apply for the credit card. The amount may vary by the bank.
2: A minimum age of 18 years
3: KYC verified documents as per the rules of the bank.
4: Usually, income proof, such as pay slips, is not needed.
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1: PAN card (mandatory for doing a financial agreement, like a credit card, in India)
2: Aadhar card, passport, or driver's license for photo identification and address proof.
3: Recent passport-size photograph (numbers might vary)
4: Details of the fixed deposit (like account number) or arrangements so that a new fixed deposit can be opened in the bank.
5: Proof of income (only in special cases, like for a higher credit limit)
Annual fee: Many FD-backed credit cards have no annual fee. But it might vary with the bank.
First-time fee: Some banks might have a one-time fee when the card is being issued as an administrative/ processing fee.
Cash withdrawal fee: Like any credit card, an FD-backed credit card will certainly have a cash withdrawal fee if cash is withdrawn from an ATM
Interest on balance: Like any credit card, an FD-backed credit card will also have accumulated interest on unpaid balances from every billing cycle.
These are the general costs and interest, but the fixed deposit or FD itself will continue to accumulate interest throughout the duration the card is being used. It's. A good idea to check these specific charges and interest rates with the bank.
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SBI (State Bank of India) Unnati credit card: This card is offered by India’s largest bank, SBI, against an FD of ₹ 25,000 or more. The features are:
1: A zero-fee credit card. For the first four years, the ₹ 499 is waived off
2: There is a ₹ 500 cashback after ₹ 50,000 spending annually.
3: 1% fuel surcharge is waived for transactions between ₹ 500 - ₹ 3000.
4: 1 point reward for every ₹ 100 spent.
HDFC Bank: Offers an FD-backed credit card. These are secured credit cards that allow a consumer to get a credit card by putting a fixed deposit as collateral for the credit limit. The fixed deposit acts as collateral or security for the fixed deposit. The FD continues to earn interest as long as the credit card is under the pledge.
Some features of HDFC’s FD-backed credit card are:
1: An FD-backed credit card is an easy option to get, as it is easy to get approved for this card. NO credit history is needed
2: Helps to build a credit score by making timely repayment at every billing cycle.
3: No income proof is needed for an FD-backed credit card.
4: Even if the FD-backed credit card is being used as a credit line, the FD still earns interest in the pledge period.
5: Allows emergency money withdrawal from the FD.
6: A grace period is given for paying off balances without any interest.
7: Rewards and cashbacks on certain transactions are offered.
8: An easy EMI option is available on credit card purchases, both for online and in-store buying options.
9: Management can be done easily with Netbanking or a mobile banking app.
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Axis Bank: This is also a very similar card as described in the previous section. The main features of Axis Bank FD-backed credit card are:
1: Does not need any income proof
2: Instantly approved as applied
3: Credit line up to 80-90% of the fixed deposit
4: Exclusive rewards and offers
5: Easy, hassle-free process for the application
6: It will help to start a credit score.
Other major banks like ICICI, Kotak Mahindra, IDFC, and many others also offer similar FD-backed credit cards in India.
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1: No minimum credit history needed.
2: Helps build an easy build of credit history with a credit score.
3: Fast approval, as the credit limit is restricted by the FD.
4: The FD itself keeps earning interest.
5: Ideal for students and first-time credit card users
6: Mostly zero annual fee
1: The FD must be there as a security guarantee. That money is locked as long as the consumer is in pledge with the bank on the credit card.
2: If payments are not made on time, interest and fees can be liquidated from the FD amount.
3: The credit rewards will be limited compared to premium credit cards
4: The credit line is restricted by the FD amount.
5: It is not ideal for emergency big spending because of the limited credit limit and the interest charged. Always a chance of potential loss of the FD money as well.
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Most banks will want the FD within their own system, as the FD is a security fund for non-payments. Hence, third-party FDs are generally not acceptable to the bank. But this should be asked, if there is any exception (such as for partner banks).
This will not be an easy option to do. As the FD is in the lien, withdrawing money before time can require special bank approval or even closure of the credit card. Specific rules of the bank to be checked.
No. It will continue to earn the same interest; nothing will be reduced as a result of the lien.
Yes, after the minimum lien period is met, the FD-backed credit card can be converted to a premium card with all the perks and rewards.
Yes, as this score will be reported to the credit bureaus.
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