Best Credit Cards With FD
- Vaani Shrivastava
- Jan 24, 2024
- 6 min read
Updated: Oct 28
Top 5 Credit Cards Issued Against FD:
Credit cards are a convenient way to pay for goods and services, but they also come with certain risks and responsibilities. If you have a low credit score or no credit history, you may find it hard to get approved for a regular credit card. However, there is an alternative option that can help you build or improve your credit while enjoying the benefits of a credit card: a credit card issued against a fixed deposit.
A credit card issued against a fixed deposit is a type of secured credit card that requires you to deposit a certain amount of money in a bank account as collateral. The bank will then issue you a credit card with a credit limit that is usually a percentage of your deposit amount. For example, if you deposit Rs. 50,000 in a fixed deposit account, you may get a credit card with a credit limit of Rs. 40,000.
The advantage of this type of credit card is that it is easier to get approved for than a regular credit card, as the bank has the assurance of your deposit in case you default on your payments. Moreover, this type of credit card can help you build or improve your credit score, as the bank will report your payment history to the credit bureaus. This can increase your chances of getting better credit offers in the future.
In this blog we'll reviewing some of the Best Credit Cards issued against Fixed Deposits.
Yes Prosperity Reward Plus Credit Card:
The Yes Prosperity Reward Plus Credit Card is a secured credit card that is issued against a fixed deposit (FD) with Yes Bank. This card offers reward points on every purchase, fuel surcharge waiver, and complimentary insurance cover. The card also has a low annual fee and interest rate, making it suitable for people who want to build or improve their credit score.
Joining and Annual Fees: Rs 399 plus taxes (waived on total retail spends of INR 10,000 within 30 days of card set up date).
Interest Rate: 3.8% p.m. (45.60%p.a).
Welcome Benefits: N/A
Special Feature: Get a minimum 15% discount on dining at select restaurants on your YES Bank Credit Card.
SBI Unnati:
SBI Unnati Credit Card is a secured credit card that is issued against a fixed deposit (FD) of at least ₹25,000 with the State Bank of India. This card is designed for people who do not have a credit history or a low credit score. It offers benefits such as reward points, fuel surcharge waiver, and zero annual fee for the first four years. The card also helps the cardholders to build or improve their credit score by reporting their payment behavior to the credit bureaus.
Zero Fee Card (Free for First 4 years)
Annual Fees: INR 499 + GST
Interest Rate: 2.75% per month, or 33% per annum
Welcome Benefit: None
Special Feature: Receive Rs 500 Cashback, within 15 days of achieving annual spends of Rs 50,000 or more.
ICICI Instant Platinum:
The ICICI Instant Platinum Credit Card is a secured credit card that is issued against a fixed deposit (FD) account. This card offers various benefits such as low interest rate, reward points, fuel surcharge waiver, and discounts on dining and shopping. The card is ideal for those who want to build or improve their credit score, as the FD acts as a collateral and reduces the risk of default. The card also has no joining or annual fee, and the minimum FD amount required is Rs. 50,000.
Lifetime Free Credit Card
Interest Rate: 3.49% per month (41.88% per annum).
Welcome Benefit: 2,000 Payback Points and Free movie tickets (up to ₹200 on BookMyShow)
Special Feature: Get a complimentary accidental death insurance cover of ₹2 lakhs.
BOB Assure Credit Card:
The BOB Assure Credit Card is a secured credit card offered by Bank of India to its customers who have a fixed deposit account with the bank. The card has a credit limit of up to 80% of the FD amount, subject to a minimum of Rs. 10,000 and a maximum of Rs. 5,00,000. The card comes with various benefits such as zero annual fee, free add-on cards, reward points, fuel surcharge waiver, and insurance cover. The card also has a low interest rate of 1.70% per month and a grace period of up to 51 days.
Joining and Annual Fees: INR 500
Interest Rate: 3.49% per month (41.88% per annum)
Welcome Benefit: None
Special Feature: Withdraw cash up to 100% of your Credit Limit, in case of any emergency.
Axis Insta Easy Credit Card:
The Axis Insta Easy Credit Card is a credit card that can be issued against a fixed deposit (FD) account with Axis Bank. This card offers instant approval and activation, as well as benefits such as cashback, discounts, reward points, and zero annual fee. The card is ideal for people who want to build or improve their credit score, as the FD acts as a collateral and reduces the risk of default. The card also has a low interest rate of 2.5% per month, and a flexible credit limit of up to 80% of the FD amount.
Lifetime Free Credit Card
Interest Rate: 2.50% per month (34.49% per annum).
Welcome Benefit: 10,000 EDGE reward points on the first transaction, equivalent to ₹100 worth of rewards or vouchers.
Special Feature: Approval is linked to your existing FD with Axis Bank and doesn't rely on your credit score.
CONCLUSION:
In conclusion, credit cards issued on FD are a convenient and secure way to access credit without affecting your credit score. They are ideal for people who have low or no credit history, or who want to improve their credit rating. Credit cards issued on FD have lower interest rates and fees than regular credit cards, and they also offer rewards and benefits. However, they also have some drawbacks, such as the requirement of a fixed deposit, the risk of losing the deposit if you default on payments, and the limitation of the credit limit to a percentage of the deposit amount. Therefore, credit cards issued on FD are not suitable for everyone, and you should carefully weigh the pros and cons before applying for one.
Credit cards issued on FD are a type of secured credit card that require a fixed deposit (FD) as collateral. The credit limit of these cards is usually a percentage of the FD amount, ranging from 50% to 90%. These cards are ideal for people who have low or no credit score, as they can help them build their credit history without risking default. Credit cards issued on FD also offer benefits such as reward points, cashback, discounts and insurance coverage.
FAQs:
1. What is a credit card issued against an FD?
These cards allow you to borrow against your existing fixed deposit (FD) at a bank. You get a credit limit based on a percentage of your FD amount, offering immediate access to funds while your FD continues to earn interest.
2. What are the benefits of such cards?
Lower interest rates: Compared to regular credit cards, these cards often offer lower interest rates as your FD acts as collateral.
Guaranteed approval: Since the card is secured by your FD, approval chances are high, even for individuals with limited credit history.
50-day grace period: Enjoy interest-free credit on purchases made within the grace period from the due date.
Additional benefits: Some cards offer rewards points, airport lounge access, and other perks.
3. What are the drawbacks?
Limited credit limit: Your credit limit is capped by your FD amount, potentially restricting your spending flexibility.
Premature FD encashment: If you fail to repay your credit card dues, your FD might be encashed early, resulting in loss of interest.
High late payment fees: Late payments on such cards often incur higher charges compared to regular credit cards.
4. Which banks offer credit cards against FDs?
Several banks in India offer these cards, including SBI, ICICI Bank, HDFC Bank, Axis Bank, IDBI Bank, and Punjab National Bank. Each bank has different eligibility criteria, interest rates, and features.
5. What is the minimum FD amount required?
Minimum FD requirements vary across banks, typically ranging from ₹25,000 to ₹50,000.
6. Can I use multiple FDs for a single credit card?
Some banks allow combining multiple FDs to increase your credit limit, but check specific bank policies.
7. Can I withdraw cash using this card?
Cash withdrawals are usually possible, but may incur higher interest rates and charges compared to purchases.
8. What happens to my FD interest when I use the credit card?
The portion of your FD used for the credit line stops earning interest, but the remaining amount continues to accrue interest as usual.
9. Can I close the credit card and continue with my FD?
Yes, you can usually close the card, but your FD must remain active until maturity to avoid premature encashment penalties.
10. Is it advisable to get a credit card against an FD?
It depends on your financial situation and spending habits. Consider if you need urgent access to funds, can manage your credit responsibly, and understand the interest rates and fees involved.