In recent years, one of the most significant changes in the Indian personal finance landscape has been the rise of a new kind of financial product: the credit card against FD. This simple yet effective tool is gaining popularity, particularly as people look for ways to make their money work harder for them without taking on unnecessary risk.
In 2025, more and more consumers are opting for credit cards against FD, driven by changing attitudes towards credit, increased financial awareness, and the growth of digital platforms like Kotak811 that make it easier to access these products. But why is this financial solution becoming so appealing? Let’s explore the factors behind this rising trend.
What Is a Credit Card Against FD?
A credit card against FD is a secured credit card where your fixed deposit serves as collateral. This makes it a suitable option for individuals who may not meet the eligibility criteria for regular credit cards, such as those with low income or a limited credit history. The credit limit is typically set as a percentage of the FD amount, often between 75% and 90%.
For example, if you have an FD of ₹1 lakh, your credit limit could range from ₹75,000 to ₹90,000, depending on the bank’s policies. The best part? The fixed deposit continues to earn interest, so you’re not losing out on the growth of your savings while using your card.
Why Are More Indians Opting for Credit Cards Against FDs?
Several factors are driving the growing popularity of credit cards against FD in India. Here’s why more people are turning to this option in 2025:
- Easier Approval Process
One of the main reasons consumers are gravitating towards this financial product is that it bypasses the need for a strong credit score or high income. Since the card is secured by your FD, the bank has a safety net, which allows individuals with less-than-perfect credit histories or limited financial documentation to gain access to credit. - Build or Improve Credit Score
Using a credit card against FD responsibly can help you build or improve your credit score. For people with no credit history, it’s an excellent way to start establishing a track record with lenders. By making timely payments and keeping utilization low, you can gradually improve your creditworthiness for future loans or credit cards. - Digital Convenience
The process of applying for a credit card against FD has become simpler, especially with digital-first platforms like Kotak811. With online applications, minimal paperwork, and instant approval, you can open an FD and apply for the card from the comfort of your home, making it easier than ever to access credit. - Maximize Your FD’s Potential
Rather than letting your FD sit idle in the bank, you can leverage it to enjoy the convenience of a credit card. With a credit card against FD, you can use the credit for day-to-day expenses, earn rewards, and still benefit from your FD’s interest. This makes it an attractive option for people who want to maximize the value of their savings. - Financial Flexibility
Unlike a traditional loan, the credit card against FD provides more flexibility. You can use it for various purposes, from online shopping to bill payments and travel expenses. It’s a reliable, low-risk tool for managing your finances, especially when you need quick access to credit.
Who Should Consider a Credit Card Against FD?
A credit card against FD is suitable for a wide range of people, including:
- First-time cardholders: If you have no credit history, a secured credit card can help you establish one.
- Young professionals: Freelancers or those in non-traditional jobs who may not have fixed income can benefit from this option.
- People with low credit scores: If you have a poor credit history, this card provides a way to access credit without relying on your credit score.
- Retirees or homemakers: Individuals who may not have regular income but want access to credit can benefit from the security provided by an FD-backed card.
What Are the Benefits of a Credit Card Against FD?
There are several advantages to using a credit card against FD:
- No credit score required: Since the card is secured by your FD, you don’t need to worry about your credit score.
- Continued interest earnings: Your FD continues to earn interest while being used as collateral, allowing you to benefit from both the credit card and your savings.
- Financial security: The credit card limit is based on the amount of your FD, reducing the risk of overspending.
- Convenient access to funds: You can use the card for various financial needs without the hassle of applying for a loan or dealing with complicated paperwork.
- Rewards and perks: Many banks offer rewards, cashback, and discounts for purchases made on secured credit cards.
Why Is This Trend Likely to Continue?
As more people in India embrace digital banking, the popularity of products like credit cards against FD is only set to increase. Digital platforms like Kotak811 have made it easier to access such financial products, streamlining the application process and reducing paperwork. Furthermore, consumers are becoming more financially aware and are increasingly looking for ways to make the most of their savings while enjoying the benefits of credit.
Final Thoughts
The rise of credit cards against FD in 2025 reflects a broader shift in how people approach credit and savings. For those who want to manage their finances smarter, this option offers a way to access credit while securing your savings. Whether you’re looking to build credit, earn rewards, or simply have access to emergency funds, a credit card against FD offers a flexible and low-risk solution.