FD-Backed Credit Cards: A secured credit card that is provided by the bank in exchange for a fixed deposit is known as an FD-backed credit card. This card is granted using your FD as collateral, as opposed to standard credit cards, which are granted based on your income, credit score, and payment history. Typically, the credit limit ranges from 75% to 90% of the amount deposited. Because the deposit insures against bank risk, this model is more practical for people with no credit or a low credit score.

What are the advantages of FD-Backed Credit Cards?

An FD-backed card helps you establish or restore your credit history. You improve your creditworthiness over time when you pay bills on time and maintain a low credit utilization rate. These cards also offer features like cashback, reward points, and discounts similar to standard credit cards. First-time borrowers benefit the most because a fixed deposit backs the card, which speeds up the borrowing process and removes the need for income or credit proof.

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FD-backed cards provide a safe financial buffer in an emergency. You can use the card whenever you need money without touching your fixed deposit. Even when you use credit, your savings continue to grow, and your FD keeps earning interest. Most banks let you convert large purchases into EMIs to simplify repayment. The deposit stays in place unless you default and the bank adjusts the FD-based debt. As a result, the card offers both security and flexibility.

Who can apply for FD-Backed Credit Cards?

First-time credit users, people with low credit scores, and those whose regular credit card applications were denied make the best candidates for FD-backed credit cards. People who want to control their spending also benefit because the card links directly to their FD balance. With minimal eligibility requirements, this card gives newcomers and students starting their careers an excellent opportunity to build a strong credit history.

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