Archive · 25 Sep 2026
FD-Backed Credit Cards Provide Credit While Savings Stay Invested
An FD-backed credit card lets you use a fixed deposit as security for borrowing.
The bank keeps the deposit invested instead of giving it to you to spend.
The deposit can continue earning interest under its terms.
The card gives you a separate limit for purchases.
Spending on the card does not directly reduce the deposit.
You should only spend what you can repay from your income.
The deposit may be locked until the card balance is settled and the lien is released.
If you do not repay what you owe, the issuer may recover eligible amounts from the deposit under applicable procedures.
An FD-backed credit card uses a fixed deposit as collateral while offering a separate credit limit.
The fixed deposit remains invested and continues earning interest under its applicable terms.
Card spending does not reduce the FD balance because the deposit and card account remain separate.
The linked FD generally cannot be freely withdrawn while the lien securing the card is active.
Applicants should review limits, fees, lien conditions, withdrawal rules, and repayment requirements before applying.
- Who
- People with a fixed deposit who want access to a secured credit card.
- What
- An FD-backed credit card links a fixed deposit as collateral while providing a separate credit limit.
- When
- Before applying and while using the card; no specific date is stated.
- Where
- The article does not specify a location.
- Why
- To access credit while keeping the fixed deposit invested and earning interest under its applicable terms.
- Collateral
- A fixed deposit serves as security for the credit card.
- Credit limit
- The limit depends on the FD amount and the issuer’s terms; one example offers 90% of the deposit.
- Example
- A ₹50,000 FD could provide a credit limit of up to ₹45,000 under a 90% limit.
- FD interest
- The deposit continues earning interest according to its applicable terms.
- Spending impact
- Credit card purchases do not reduce the FD balance.
- Withdrawal restriction
- The FD cannot be freely withdrawn while the lien remains active.
- Repayment risk
- If dues remain unpaid, the issuer may recover eligible outstanding amounts from the FD under applicable procedures.