What if the bank delays the FD release after card closure?

If your card has been terminated but your FD remains locked or un-refunded past 15 working days, immediately escalate the matter to the bank's Grievance Redressal Officer. If you receive no satisfactory resolution within 30 days, you can lodge an official complaint online via the official RBI portal.

How to Close an FD Credit Card: Step-by-Step Process

FD-backed credit cards, also known as secured credit cards are a suitable option for first-time cardholders and individuals building their credit history. These cards are issued against a fixed deposit (FD), which acts as collateral and reduces risk for issuers. However, once your credit profile improves or you no longer need the card, you may want to close it. Before initiating closure, it is important to understand the process, what happens to your FD amount, and whether closing the card can impact your credit score. Here is a comprehensive guide on how to close your FD credit card and get your deposit back without unnecessary delays.

How to Close an FD Credit Card

While the exact process differs from issuer to issuer, here is the common process you can follow to close an FD credit card:

Step 1: Clear Outstanding Dues

Before requesting closure:

Pay all pending bills, EMIs, fees, and charges
Ensure there are no unbilled transactions
Redeem any accumulated reward points (if applicable)

Note: Card issuers usually do not process closure requests until dues are settled.

Step 2: Stop Auto-Debits & Recurring Payments

Remove the card from:

Subscription services
Utility payments
OTT platforms
Wallets and UPI AutoPay mandates

This prevents transaction failures after closure.

Step 3: Submit Card Closure Request

You can usually request closure through:

Mobile banking app
Internet banking portal
Customer care
Branch visit
Email or written request

The issuer may ask for confirmation before proceeding.

Step 4: Request FD Release (If Applicable)

Depending on the issuer’s policy, the FD release process may happen in one of the following ways:

Automatic FD Release: Some issuers automatically remove the lien and transfer the FD amount (along with applicable interest) to your linked savings account after the card closure is completed.

Manual FD Closure Request: In certain cases, you may need to submit a separate request through internet banking, customer care, or branch visit to release or withdraw the FD.

Step 5: Obtain Closure Confirmation

Always collect:

Closure request number
Final closure confirmation
FD release confirmation

Keep these records for future reference.

Steps to Close an FD Credit Card Online & Offline

Most major issuers, like SBI, ICICI, HDFC, Axis, and Kotak offer multiple channels to request card closure.

How to Close an FD Credit Card Online

1. Log in to your bank’s official internet banking portal or mobile application.
2. Navigate to the Cards or Credit Cards section.
3. Look for options like Service Requests, Card Closure, or Cancel Card.
4. Select your FD credit card, state the reason for closure, and submit the request.
5. You will receive an OTP on your registered mobile number to confirm the cancellation.

How to Close an FD Credit Card Offline

Customer Care: You can call the issuer’s dedicated credit card helpline and request a cancellation by stating the valid reason.

Branch Visit: You can visit the nearest branch, fill out a credit card closure form and submit a physical letter requesting the removal of the lien on your FD.

Things to Check Before Closing an FD Credit Card

Before closing your FD-backed credit card, make sure you complete this checklist. Neglecting these steps can delay your card closure or result in unexpected fees.

Clear All Outstanding Dues: The issuer will reject your closure request if there is even a single rupee left unpaid. This includes any pending EMIs, annual fees, or late charges.

Foreclose Existing EMIs: If you have running EMIs on your card, you must contact the issuer to foreclose them. The remaining balance will be billed to your card as a lump sum, which you must clear before cancellation.

Redeem Your Reward Points: Unused reward points usually lapse the moment a card is closed. Spend them on vouchers, cashbacks, or merchandise before initiating the closure.

Cancel Auto-Debits: If your card is linked to subscription services (like Netflix, insurance premiums, or utility bills), switch those payments to another card or account.

Does Closing an FD Credit Card Affect your Credit Score

Yes, closing any credit card can cause a temporary dip in your credit score, but the long-term impact depends on how you manage your remaining credit profile.

Factor	Impact on Credit Score
Credit Utilization Ratio (CUR)	Closing a card reduces your total available credit limit. If you spend the same amount on other cards with a lower overall limit, your CUR will spike, which can lower your score.
Average Age of Credit	If this was your very first credit card, closing it will eventually shorten your credit history length once it drops off your report, negatively impacting your score.
Credit Mix	If you don't have other credit cards or active loans, closing your only credit card might slightly reduce your credit mix diversity.

What Happens to the FD After Closing an FD Credit Card

After your FD credit card closure request is successfully processed, the next step is the release of the linked fixed deposit. Since the FD acts as collateral, banks usually keep a lien on the deposit until all card-related obligations are completed.

Typically, one of the following scenarios applies:

Scenario 1: FD Gets Released Automatically

Some issuers automatically remove the lien and transfer the FD amount, along with applicable interest, to the linked savings account after closure is completed.

Scenario 2: Separate FD Closure Request Is Required

Certain issuers only close the credit card account and remove the lien, while the customer must separately request FD withdrawal or closure.

Before considering the process complete, check:

Whether the FD status is active, lien-marked, or released
Estimated timeline for receiving the amount
Whether interest continues until withdrawal
Any premature withdrawal conditions or deductions

Note: Processing timelines may vary depending on issuer policy and internal verification procedures.

FAQs

Can I break my FD before closing the secured credit card?

No, when you open an FD-backed credit card, the bank places a lien on your fixed deposit. This means the FD is legally locked as collateral. You cannot prematurely withdraw or break the FD while the credit card account is open and active.

Can I close the FD and keep the credit card active?

No, since the credit card's limit is directly linked to the FD amount (usually 80% to 90% of the deposit value), the card cannot exist without it. To get your FD money back, the credit card must be permanently cancelled.

Can an FD credit card be reopened after closure?

No, once a credit card account is permanently closed, it cannot be reactivated or reopened. If you want a secured card again in the future, you will have to create a fresh fixed deposit and apply for a new credit card.

Are there any closure charges for FD credit cards?

Banks do not charge a specific "closure fee" for cancelling a credit card. However, if you choose to break the underlying Fixed Deposit prematurely (before its scheduled maturity date), the bank may levy a standard premature FD withdrawal penalty.

What happens to the FD after closing an FD credit card?

Once the issuer processes your credit card cancellation request, the credit card department will instruct the backend team to remove the lien from your fixed deposit.

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