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Is Credit Card Against Fixed Deposits A Good Proposition?


Individuals who are desperate for credit card and fail to meet the eligibility criteria to avail a credit card. But, they can look for this option through another route.


Only some banks are providing this facility to customers who will get instant credit card by opening a fixed deposit with bank.

Individuals who have low credit history, who are self employed or who have been rejected with credit card application can open such Fixed deposits. The credit limit depends on the fixed deposit amount.

Is Credit Card Against Fixed Deposits A Good Proposition?

Now, let us have a look at some features offered by banks:

1) ICICI Bank

  • The Cardholder either singly or jointly with Second Fixed Deposit Holder shall be required to maintain/place a Fixed Deposit of minimum Rs 20,000 amount with ICICI Bank.
  • Interest rate on credit card will be 2.49 per cent per month.
  • The Credit limit will be 85 % of fixed deposit value ,subject to maximum of Rs 3 lac.
  • The credit limit on the Instant Credit Card shall be eighty five percent (85%) of the Fixed Deposit amount, subject to minimum credit limit of Rs 17,000 and maximum of Rs 5 lakhs.
  • The fixed deposits opened / placed by HUFs, partnership firms, minors shall not be entitled for Instant Credit Card.
  • The Instant Credit Card shall be activated post lien is marked on the Fixed Deposit.

2) SBI Advantage Plus Card

  • Credit limit will be 85 per cent of your FD.
  • Interest rate will be 2.25 per cent every month.
  • Joining and annual fees are Rs 500.

3) Axis Bank

  • Kindly note the minimum Fixed Deposit requirement for issuance of Insta Easy Credit Card is Rs 20,000 and maximum of Rs 25,00,000.
  • Insta Easy Credit Card cannot be issued against Tax Saver FDs, Flexi-Deposits (Auto-sweep FDs), FDs in the name of HUF/society/trust/companies. Insta Easy Credit Card cannot be issued to minors.
  • Joining Fee Rs.500.
  • Finance Charges (Retail Purchases & Cash) 2.50% per month(34.49% per annum)

What are the disadvantages?

If the cardholder fails to repay the amount on time, the amount will be repaid from your fixed deposit.
This means the depositor cannot break the FD as long as he holds the card.

Read more about: credit card fixed deposits
Story first published: Tuesday, April 14, 2015, 10:00 [IST]
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