Posted on: June 5, 2015

Optimize your Fixed Deposit for a Credit Card

Credit Card

Was your credit card application rejected by banks recently? Have you been wondering why that happened and are dissatisfied with the telecaller’s response? Banks can reject credit card applications due to any number of reasons. Even for reasons that are beyond your control.

If the rejection has put you in a difficult spot, don’t lose hope, there is a way out! You can get a credit card against your fixed deposits. Also known as a Secure Card, a credit card against FD acts similar to an overdraft facility. Your credit card will act as a loan against the fixed deposit. Your FDs will now come in handy not just for saving tax but also for getting you a credit card. This is especially good news for those of us who have zero or poor credit history. You get to start afresh and your “performance” with this card will help you establish your credibility for your future financial needs. What’s more, once you have built your credibility using this card, it will be easier for you to get your loan or card applications approved.

Who should avail this offer

  • People with poor or zero credit history
  • People whose credit card applications have been rejected on grounds of low income
  • People residing in areas blacklisted by banks
  • People employed with companies blacklisted by banks


  • FD should be for a minimum amount of Rs 20,000.
  • Credit limit will be calculated as 85% of the FD amount.
  • The offer can help build credit history.

Impact on fixed deposit

Your FD will remain intact, along with the interest amount. You will continue to earn the same interest on your investment as before, according to the interest rate applicable at the time of opening the FD. However, you need to be careful with your credit card bill payment.

  • Default on credit card dues will be adjusted against the FD: If you default on your credit card repayment, the dues will be adjusted against your FD amount. So, to ensure your investments do not have to bear the brunt of your expenditure, pay your bills on time!
  • Repayment defaults will reduce your CIBIL score: Those adopting this route because of poor credit score or to build a credit history should be especially particular of avoiding payment defaults. Any late payments or defaults will reflect on your score, thereby negating the purpose of taking a credit card against an FD. 

How does one go about it?

Getting a credit card against a fixed deposit account with a bank is convenient and hassle free. All you have to do is contact the bank where you have been operating your FD account and apply for a credit card. In case you do not have an FD, you will have to open one before a credit card can be issued. Do keep in mind the bank will treat your FD as collateral for the card. That is, your FD will act as security for your credit card.

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