Credit Card Against Fixed Deposit

Banks offer a secure credit card against a fixed deposit. Some popular banks that offer credit cards in such a way are SBI, Axis, ICICI, etc. You can find more about it at by reading further. When applications for credit cards are made on this collateral basis, all other factors involved in availing the same become somewhat insignificant. This guarantee keeps the banks relieved regards recuperating their money if credit not paid.

Other factors considered on issuing a credit card are:

  • The debt income ratio
  • Repayment capacity
  • Fixed deposit funds

Credit cards against fixed features are most suitable for:

  • Individuals with no or weak credit history
  • Individuals who do not meet the salary criteria
  • New wage earners
  • People living in an area blacklisted by lender
  • Ostracised individuals who possess a poor reputation

Credit Card against Fixed Deposit Benefits and Features

  • Minimum amount: Generally, the minimum fixed deposit amount is 20,000
  • Credit limit: the credit limit is based on the amount you've deposited in your fixed investments. The limit is generally 80 – 85% of the sum deposited.
  • Documentation: one does not have to comply with much documentations.
  • Minimum tenure: the minimum tenure of the fixed deposits should be at least 6 months
  • Free interest period: the interest-free period generally ranges from 48 – 55 days.
  • Rewards: one can earn multiple cash backs, reward points and discounts on making transactions.
  • Fixed deposit interest: credit card users continue to get interest on their fixed deposits.

How to avail credit cards?

Getting a credit card against fixed deposits is easy. All you have to do is first open a fixed deposit account with the bank. Make sure to invest at least Rs. 20,000 while applying for the card. In case you already have one, you can easily avail a credit card on the same. Once the fixed deposit account is created, you can apply and get confirmation of the credit card application.

Impact of credit card on fixed deposits

There is no impact of the credit cards on your fixed deposit account. You continue to receive the same interest rate that was set on opening the account. However, the impact of credit will be seen on the bill payment. If you haven't made the payment, the outstanding amount will be adjusted with your FD. Thus, if you do not want to disturb your savings, always make your bill payments on time.

It further helps in building your credit score. Further, in the case of an emergency, you can use your credit card rather than closing your fixed deposit account. Banks offer enough time to make repayments of the outstanding bills. Thus, taking loans becomes easier.

Banks that offer credit cards against fixed deposits are:

  • State Bank of India
  • Kotak Mahindra Bank
  • Bank of Baroda
  • Axis Bank
  • ICICI Bank
  • Central Bank of India

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