Credit Card Against FD: How Secured Cards Work in India

A credit card against an FD (a secured credit card) is a regular credit card whose limit is backed by a fixed deposit you open with the same bank. The bank marks a lien on the FD and gives you a limit of usually 75% to 100% of the deposit, often without income proof or a credit history. It is one of the simplest ways for students, homemakers, new earners and people with a low CIBIL score to build a credit record, provided you pay the full bill on time.

How a secured credit card works

1. You open an FD with the issuing bank, or pledge an existing one.
2. The bank marks a lien on it, so you cannot withdraw or break it while the card is active.
3. You get a credit limit linked to the FD amount.
4. You use and repay the card normally. Bills, due dates, interest-free periods, interest and fees work just as on an unsecured card.
5. The card is reported to credit bureaus such as CIBIL, Experian, Equifax and CRIF High Mark.
6. When you close the card and pay all dues, the lien is removed and the FD is yours again.

The FD keeps earning interest throughout, and that interest is taxable at your slab rate.

Who should consider one

• First-time borrowers with no credit history, such as students or young earners.
• Homemakers and freelancers without regular salary slips.
• People rebuilding credit after missed payments, a settlement or a rejection. See our guide on getting a loan with a low CIBIL score.
• Anyone who wants a tightly capped card to control spending.

Sample FD-backed cards (October 2026)

Figures are from issuer pages and comparison sites as of October 2026, and some issuer pages contradict each other. Fees, minimum deposits and limits change often, so confirm on the bank's own website before applying. Inclusion here is not a recommendation.

What it costs

A secured card is not a cheaper card. Interest, fees and charges are the same as on unsecured cards:

• Interest on unpaid balances: often around 2.5% to 3.75% a month, which is roughly 30% to 45% a year. IDFC FIRST Bank, for example, lists an APR range of 8.5% to 46.2% on its WOW card.
• GST: 18% on interest, fees and charges.
• Late payment fees: set by each issuer, usually rising with the amount due.
• Cash withdrawal fees: often a flat fee plus interest from day one, though some FD cards offer interest-free cash periods.
• Forex markup: varies; some FD cards charge none.

Our explainer on how credit card interest works shows why carrying a balance is so expensive.

Worked example: building credit with a ₹50,000 FD

Aman, 22, opens a ₹50,000 FD at an assumed 6.5% a year and gets a card with a 90% limit. All figures are illustrative.

• Credit limit: 90% × ₹50,000 = ₹45,000
• FD interest earned in a year: ₹50,000 × 6.5% = ₹3,250 (before tax)
• Spending target for a healthy utilisation ratio (under 30%): 30% × ₹45,000 = ₹13,500 a month or less

Aman puts his phone bill, a monthly grocery run and a streaming subscription on the card, about ₹6,000 a month, and pays the full statement balance by the due date through auto-debit. After six to twelve months of on-time payments, he has a credit history that lenders can score.

Now suppose one month he pays nothing on a ₹20,000 bill:

• Interest for one month at 3.5%: ₹20,000 × 3.5% = ₹700
• GST at 18% on that interest: ₹126
• Plus a late payment fee and GST on it, and a late payment reported to the bureaus

The FD does not stop any of this. It only means the bank can recover the money from the deposit if the dues stay unpaid. Try your own numbers in our credit card interest calculator.

Secured card vs other ways to build credit

A loan against FD is useful when you need a lump sum. A secured card is better for building a revolving credit history with small, regular spends. If you only need to borrow occasionally, our EMI calculator helps compare instalment options.

Your rights as a cardholder

RBI's credit card rules apply to secured cards as they do to other cards. As of October 2026:

• Closure: the issuer must close your card within seven working days of your request once all dues are paid, or pay you ₹500 for each day of delay.
• Consent: a card cannot be issued or its limit raised without your explicit consent.
• Billing: you can change your billing cycle at least once, and the statement must explain the consequences of paying only the minimum due.
• Complaints: contact the bank's grievance officer first; if not resolved within 30 days, file with the RBI Integrated Ombudsman at cms.rbi.org.in.

Tips to get the most from a secured card

1. Pay the full statement balance, not just the minimum due. Read our guide to the minimum amount due trap.
2. Keep utilisation below about 30% of the limit.
3. Set up auto-debit for at least the minimum, so you never miss a due date.
4. Use it for small regular bills you would pay anyway.
5. Check your credit report after six months to confirm the card appears and is reported correctly.
6. Ask for an unsecured upgrade after 12 to 18 months of clean history. Keep the secured card open if it is free and helps your average account age.
7. Do not lock away your emergency fund. Use money you will not need for the FD's tenure.

Key takeaways

• A credit card against an FD gives a limit of usually 75% to 100% of the deposit, often without income proof.
• The FD keeps earning interest but is under lien; the bank can adjust it against unpaid dues.
• Interest, GST and late fees are the same as on unsecured cards, so pay in full every month.
• In our illustrative example, a ₹50,000 FD gave a ₹45,000 limit; keeping spends under ₹13,500 a month supports a healthy utilisation ratio.
• After 12 to 18 months of on-time payments, you can usually move to an unsecured card.