If you do not have a steady income or a reasonably long credit history, securing a new credit card can be challenging. To address such situations, lending institutions offer individuals FD-backed credit cards.
These credit cards are also known as secure credit cards. They offer individuals practical solutions by permitting them to leverage their fixed deposits (FDs) to avail credit. Still, the question remains: are such credit cards worth it?
This write-up discusses these fundamental concepts, how these credit cards work, and the top options available in 2026.
What are FD-backed credit cards?
FD-backed credit cards are secured credit cards issued against pledged fixed deposits with a financial institution. In such cases, FD acts as collateral, generally earning interest while providing the user with an ideal foundation for setting up a credit limit.
The credit limit in such cases is generally between 75-90% of the total deposit amount. If utilised responsibly, these credit cards can go a long way to help individuals build a neat credit history and a solid credit score.
Top credit cards against fixed deposits in 2026
| Credit card variant | Fixed deposit required | Joining fee/ Annual fee | Age criteria |
|---|---|---|---|
| SBI Card Unnati | Rs.25,000 | First 4 years – NIL, 5th year onwards – Rs.499 | 18–70 years |
| IDFC FIRST Bank – FIRST WOW! Credit Card | Rs.20,000 | Nil | 18–70 years |
| Axis Bank – Insta Easy Credit Card | Rs.15,000 | Rs.500 (often waived) | 18–70 years |
| AU Small Finance Bank – NOMO Card | Rs.20,000 | ₹499 + GST | 21–65 years |
| Kotak 811 Dream Different Credit Card | Rs.10,000 | Nil | 18–75 years |
| Axis Bank MY ZONE EASY Credit Card | Rs.15,000–25 lakh | Rs.500 | Minimum 18 years |
| Bank of Baroda – Prime Credit Card | Rs.15,000 or more | Nil | 18–85 years |
| DCB Payless Select Credit Card | Rs.25,000 | 350 + GST | 18–75 years |
| SBM Bank – Step UP Credit Card | Rs.2,000 | No joining fee (if FD > ₹5,000) | 21–65 years |
Note: The credit cards discussed above are illustrative in nature. For updated FD requirements, joining fees, age criteria, and other factors, refer to the official website of the issuing institution for the respective credit card.
How does a secured credit card work?
When you open a new fixed deposit and apply for a credit card against it, the deposit in this case serves as the ‘collateral’. This means that if you default on your repayments, the respective financial institution is well within its rights to recover dues by liquidating the fixed deposit pledged by you.
Furthermore, the credit card issued to you will function as a regular credit card with a predetermined credit limit for your deposit and will help you in building a clean repayment history. If you make payments on time and never miss due dates, this can open the door to better personal loans, home loans, premium credit cards, etc., at more lucrative rates and with easier repayment terms.
Benefits of fixed-deposit-backed credit cards
- As fixed deposits back these credit cards, they are easily approved with minimum documentation.
- They help individuals to improve their credit history and boost their credit scores.
- Once your scores improve, you can apply for new credit tools and options, such as exclusive loan offers and premium credit cards.
- These credit cards also offer an interest-free period of 48-55 days, giving ample time to plan and meet repayment obligations.
- The fundamental fixed deposit continues to earn interest while acting as collateral. This way, it can provide dual benefits to the fixed deposit holder: one in interest and the other in acting as solid collateral.
Risks associated with fixed deposit-based credit cards
- Fixed deposit funds are locked until dues are cleared.
- Usage experience can get complicated if repayment deadlines are missed.
- Generally, the permitted credit limit is only 75–90% of the total FD amount.
- High interest rates and late-payment fees can also be imposed on unpaid balances.
- Annual fees may apply, along with hidden charges.
- Risk of FD confiscation or liquidation, and serious legal action in case of default.
- Limited rewards, perks and offers in comparison to premium unsecured cards.
- Mismanagement can negatively affect peace of mind, credit score and overall credit profile.
Before applying for any new credit card, it is prudent to consult a certified financial advisor to have a clear understanding of suitability, fees, and long-term financial impact.
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