Credit Card against fixed deposit: A complete guide

Within the wide variety of financial tools, Credit Cards have emerged as an important asset for managing daily expenses, navigating emergencies, and establishing creditworthiness. However, for individuals lacking a robust credit history or seeking a Credit Card without enduring the traditional approval process, a unique solution presents itself: Credit Cards secured by fixed deposits.

Understanding Credit Cards against fixed deposits

A Credit Card against fixed deposit, also known as an FD secured Credit Card, offers a practical avenue for individuals looking to obtain a Credit Card by pledging a fixed deposit as collateral. It operates as a relationship between a fixed deposit account and a Credit Card, with the fixed deposit serving as security against the credit limit extended by the issuing institution.

How does an FD secured Credit Card operate?

It’s easier to understand the working of an FD secured Credit Card via an illustrative example. Suppose you deposit ₹50,000 into a fixed deposit account with IDFC FIRST Bank. The bank can then issue the FIRST WOW! Credit Card, an FD secured card with a credit limit of 100% of the deposited amount, i.e., ₹50,000. You can use your Credit Card up to this limit for any payments and even convert your purchases into easy EMIs while earning up to 7.5% interest on your deposits. 

Advantages of FD secured Credit Cards from IDFC FIRST Bank
 

Accessibility

Individuals with limited or no credit history such as students or new professionals can easily obtain an FD secured Credit Card, providing them with an avenue to build creditworthiness responsibly.

No credit checks or income verification

To apply for a Credit Card against a fixed deposit, you don’t have go through the lengthy credit checks or the income verification process.

Low interest rates

The fixed deposit acts as collateral, mitigating the risk for the issuing bank and potentially resulting in lower interest rates and fees for the cardholder. The IDFC FIRST FIRST WOW! Credit Card comes with a low APR starting at just 9% per annum.

Zero interest on cash withdrawals

Cardholders can enjoy zero interest charges on cash withdrawals through ATMs for up to 48 days.

Zero-markup fee

The FIRST WOW! Credit Card comes with a zero-markup fee on all international transactions, making it suitable for students and travellers planning a trip abroad for leisure or higher education.

Merchant offers

Individuals can also enjoy exclusive offers across 1500 restaurants and retailers across the country.

Reward programs

The FIRST WOW! secured Credit Card offers up to 4X never expiring rewards that can be redeemed anytime for additional discounts.

Credit building

Regular usage and timely repayment of dues on an FD secured Credit Card can positively impact one's credit score, facilitating future financial transactions.

How to apply for a Credit Card secured by a fixed deposit?

The process of applying for an FD secured Credit Card is relatively straightforward. You can apply for the FIRST WOW! Credit Card in 3 steps:

Register

Apply at the bank portal or download the mobile app and register your details.

Choose and fund your fixed deposit account

Choose the type of fixed deposit and enter the required amount into a fixed deposit account with IDFC FIRST Bank. The minimum deposit limit is ₹10,000. (Minimum FD for NRI is ₹25,000)

Complete the Know Your Customer (KYC) process

Complete the KYC with the bank to gain full access to your account.

The bank will review your application and contact you regarding the FIRST WOW! Credit Card with ongoing offers and approve the limit of your Credit Card.

Eligibility criteria for FD secured Credit Cards

While specific eligibility criteria may vary between banks, the general requirements for obtaining a FIRST WOW! FD secured Credit Card include:

Age

Applicants must be above the age of 18 years.

Fixed deposit

The applicant must possess an active fixed deposit account in the ‘cumulative’, ‘reinvest’ or ‘auto renew’ options.

Documents

The applicant needs to possess a PAN card and an Aadhaar card.

Conclusion

In a financial landscape characterised by convenience and accessibility, Credit Cards secured by fixed deposits offer a smart solution for individuals seeking to establish or rebuild their creditworthiness. By leveraging the security of a fixed deposit, these Credit Cards provide a gateway to financial independence and responsible spending.

In partnership with reputable institutions such as IDFC FIRST Bank, these Credit Cards not only offer accessibility and security but also pave the way for a brighter financial future. So take charge of your finances today and embark on a journey towards financial empowerment with a Credit Card secured by a fixed deposit.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.