The Ultimate Guide to FD Backed Credit Cards in India in 2027

What Is an FD Backed Credit Card?

An FD-backed credit card (also known as a secured credit card or credit card against fixed deposit) is issued against a Fixed Deposit you open with the bank that acts as a collateral. Instead of evaluating your income or credit history, the bank uses your FD to secure the credit limit.

Here’s how it works:

• You open an FD (typically ₹5,000 or more) with your Bank.

• The bank places a lien on the FD as collateral.

• You receive a credit limit (usually 90%–110% of the FD amount).

• You use and repay the card like a regular credit card.

• Your FD continues earning interest.

• If you default, the bank recovers dues from the FD.

Because the bank holds security, approval rates are extremely high compared to unsecured credit cards.

 Note: You cannot withdraw or close your FD while the card is active. To free up the FD, you must close or settle the card first.