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    Credit Card Against Fixed Deposit

    Credit cards against fixed deposit is a fairly new concept in the Indian banking industry. The primary aim of this scheme is to provide credit cards against the value of your fixed deposit. In such a setting, the bank offers lower interest rates on the credit cards, while being completely secured in terms of credit repayment by the customer. These cards denote secured credits which can be recovered by dissolving the fixed deposit.

    Currently in India, private sector banks such as ICICI Bank, Axis Bank, Kotak Mahindra Bank etc. and public sector banks including the State Bank of India (SBI), Central bank of India, Syndicate Bank etc. offer the option to avail credit cards against fixed deposit accounts. Generally, banks will offer credit cards of limit anywhere between 80-100% of the actual value of the fixed deposit.

    Why credit card against fixed deposit?

    Credit cards are great products that provide you with instant liquidity but come with high interest rates on the borrowed credit. Availing credit cards is easy if your yearly income exceeds Rs.5 lacs and you have a good credit history, but many don’t belong to this bracket. A professional or a self-employed individual earning something around Rs.2 lacs a year can still get a credit card, provided they have an impeccable credit history.

    For instance a fresher working in his first job usually won’t have a credit history or a substantial yearly income. People under this category cannot get a credit card unless they can prove their credit worthiness to the bank. But they can still receive a card if applying against their FDs by opening a fixed deposit account of more than Rs.20,000 with the bank.

    How it works

    A typical credit card against a fixed deposit will have credit limit of 80% of amount in the fixed deposit. Once you apply for the card, the amount in your fixed deposit will have a lien marked on it till you handover the card back to the bank.

    The interest rate on this card will be lower than what is offered on regular credit cards. The bank meanwhile can recover unpaid credit by dissolving your fixed deposit. This offers a win-win situation for both the borrower and the lender.

    Cards are issued with minimum requirements for the customers. In general, if a bank offers this product, you can easily avail a credit card without the associated credit checks such as credit score, repayment history, defaults in the past etc. – issues that inhibit easy dispersal of credit cards to customers.

    Benefits of credit cards against FD
    • Easy liquidity anytime you need the cash.
    • Very few, if any, documentation required to apply for credit card against FD.
    • Avoid foreclosure of fixed deposit when in need of urgent cash.
    • A grace period of 48-55 days to repay the borrowed credit interest-free.
    • Uninterrupted interest payment on fixed deposit regardless of credit card issuance.
    • No income eligibility requirements when applying for the card.
    • Cards sanctioned irrespective of credit history.
    • Secured credit that can be recovered by the bank without resorting to extreme measures such as legal recourse.

    These are some of the benefits of credit cards issued against a fixed deposit account.

    Risks to avoid

    Though these cards offer easy liquidity and are easily available, they are still offered against your savings deposited with the bank. Getting carried away while spending the credit limit and not being able to repay the credit in time can potentially strip you of your savings. This can affect your short term liquidity while affecting your long term asset allocation process.

    You have to ensure that the bills are paid in time to avoid complications with your fixed deposit account. Interest rates from credit cards, however low, can potentially compound to high levels, and so should be treated with caution.

    Major providers of CC against FD
    • ICICI Bank: ICICI Bank Coral Credit Card
    • SBI: Advantage Credit Card
    • Axis Bank: Insta Easy Credit Card
    • Central Bank of India: Aspire Credit Card (offered against Aspire term deposit scheme)
    • Kotak Mahindra Bank: Aqua Gold Card
    • Syndicate Bank: Classic/Gold Credit Card

    Overall, credit cards against FD is a great option for your short term liquidity requirements and if you are having trouble availing a regular credit card.

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

    Customer Reviews

    • HDFC Bank Fixed Deposit
      "Excellent services"
      0.5 4.5/5 "Excellent!"
      The best bank for a fixed deposit is HDFC Bank. The customer support is good and they are responsive as well. They offer an interest like other bank on my savings. The best is there is no lock in period so I close this account when ever I want too and I can do it with just a click away online. Where as other banks they would ask me to go to the home branch.
      Was this review helpful? 1
      , new delhi
      Reviewed on Apr 16, 2019
    • review Fixed Deposit
      "Good interest on savings"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit with Saraswat Cooperative Bank. The customer support is good and they are responsive. I been a customer for 20 years. The interest they provide on my savings is more than satisfactory and there are no charges taken for this account features.
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 15, 2019
    • SBI Fixed Deposit
      "Less interest rate"
      0.5 5.0/5 "Blown Away!"
      Two months before I deposited my money nearly 1,50,000 in SBI . I am really happy with their customer service and response . But the interest rate is around 6.85 % which is lesser comparing to other bank . Since It is Government bank, I need not to worry in future if anything uncertain happens .
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 15, 2019
    • Central Bank of India Fixed Deposit
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have done fixed deposit on CENTRAL BANK OF INDIA an year ago, i did not face any issue in creating account. They have given me limited tenure period, i use to pay my payment through my credit card of same bank, now i have withdrawn my deposit. I got good interest rate so far my experience was good.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Apr 15, 2019
    • Citibank Fixed Deposit
      "Satisfactory"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit with Citibank. I could get the clear details online. Though I would not be able to open this account through the mobile application. I can do it through the desktop. It has been a good experience till date and beneficial too.
      Was this review helpful? 0
      , mumbai
      Reviewed on Apr 15, 2019
    • SBI Fixed Deposit
      "Good in all"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit account with State Bank of India. The customer services are good. The process can be done online. The lock in period depends on the choice of the customer. The minimum tenure is six months. The interest rate provided is also equally good.
      Was this review helpful? 3
      , new delhi
      Reviewed on Apr 13, 2019
    • Bank of Baroda Fixed Deposit
      "Overall no hassles"
      0.5 5.0/5 "Blown Away!"
      It is a very simple process to open a fixed deposit account with Bank of Baroda. The lock in period is for five years. They provide a very good interest on my savings. The process at the bank is also good. There are no hassles in the overall experience.
      Was this review helpful? 0
      , faridabad
      Reviewed on Apr 12, 2019
    • SBI Fixed Deposit
      "Looking for More Investment"
      0.5 5.0/5 "Blown Away!"
      Five years before , I opened a Fixed deposit in SBI , It automatically renewed on every year. I just monitors in online . I am looking for more investment in the future. At one stage I open this fixed deposit for my children's education or marriage .
      Was this review helpful? 1
      , secunderabad
      Reviewed on Apr 10, 2019
    • Federal Bank Fixed Deposit
      "Good customer support"
      0.5 5.0/5 "Blown Away!"
      In Federal bank , for Recurring deposit they provide very good interest rate of almost 7.5% .Even it is applicable for shorter period and longer term also . Very good customer support . After comparing with other banks , I decided to start my FD in Federal bank .
      Was this review helpful? 1
      , kochi
      Reviewed on Apr 09, 2019
    • review Fixed Deposit
      "Overall good"
      0.5 5.0/5 "Blown Away!"
      I hold a fixed deposit account with City Union Bank. The rate of interest is of 7.25% on my savings. The customer support is good and they are responsive as well. It was easy to open this account and I can do it online. There are no hassles in the overall service.
      Was this review helpful? 0
      , chennai
      Reviewed on Apr 05, 2019
    • ICICI Bank Fixed Deposit
      "Good Accesibility"
      0.5 5.0/5 "Blown Away!"
      My fixed deposit with ICICI, I have opened the account through online just from the I mobile. I invested around Rs. 1 lakh its for long duration. The interest is good, I can withdraw the money through online banking without any charges. I am very fine with them.
      Was this review helpful? 3
      , indore
      Reviewed on Apr 03, 2019
    • IndusInd Bank Fixed Deposit
      "Good interst for FD savings"
      0.5 4.0/5 "Great!"
      I opened fixed deposit account through online, the process was simple without any documentation. Currently the bank is providing the interest around 8% for the FD account. I done it before year it has tenure this year one year. I think this august my Fd amount gets matured.
      Was this review helpful? 3
      , bangalore
      Reviewed on Apr 03, 2019
    • Standard Chartered Bank Fixed Deposit
      "Good service"
      0.5 4.5/5 "Excellent!"
      Hold a fixed deposit Account with STANDARD CHRATED BANK . The best thing is their Customer Service .The response of banking service and banking staff is good here . The online banking is good and the services at the branch is also satisfactory.So far it has been good experience with STANDARD bank .
      Was this review helpful? 1
      , new delhi
      Reviewed on Apr 03, 2019
    • HDFC Bank Fixed Deposit
      "Its Good"
      0.5 4.0/5 "Great!"
      I went to the bank for the FD process, the service was good they helped to open the account on the same day. I took the fixed deposit for the period of three years and I deposited Rs. 1 lakh, I would get the amount of Rs. 1.35 lakh. I do have HDFC online access .
      Was this review helpful? 3
      , hyderabad
      Reviewed on Apr 03, 2019
    • Post Office Fixed Deposit
      "Good Experience"
      0.5 4.0/5 "Great!"
      My fixed deposit got matured with Post office, the interest was nominal. The staff are good they gave me good service. There was no online option hence I need to visit for depositing the cash. I invested for five years for fixed deposit, my experience was good.
      Was this review helpful? 1
      , chennai
      Reviewed on Apr 03, 2019
    • HDFC Bank Fixed Deposit
      "Good overall"
      0.5 5.0/5 "Blown Away!"
      I have a fixed deposit account with HDFC Bank and the banking process is good. I could open this account online and the account has been beneficial too. I earn a good interest. I can also close this account without having to go in person to the bank. It can be done online too.
      Was this review helpful? 2
      , bangalore
      Reviewed on Mar 29, 2019
    • IndusInd Bank Fixed Deposit
      "Good Investment with Indusind bank"
      0.5 5.0/5 "Blown Away!"
      One time investment I have done in Indusind bank as a fixed deposit, it has locking period around one year. They are providing the interest around 8% for one year. Online option is easy to activate the service and closing, there is no charges for the FD maintenance.
      Was this review helpful? 2
      , indore
      Reviewed on Mar 26, 2019
    • Axis Bank Fixed Deposit
      "Convenient"
      0.5 4.5/5 "Excellent!"
      I have a Fixed Deposit with Axis Bank because they have offered more interest than ICICI BANK and its been more than 1.5 years. Their customer service is always good. The interest rate is around 7.6% which am not sure. I can manage the account online. I opted for 18 months.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Mar 26, 2019
    • Bank of Baroda Fixed Deposit
      "Need improvement on customer support"
      0.5 4.0/5 "Great!"
      I have done one time investment fixed investment in Bank of Baroda, it has five year of locking period. The interest is nominal for the FD, I believe BOB give the interest around 8% , however there was no proper information regarding the interest. My father have taken this FD on my name, every year I deposit the amount.
      Was this review helpful? 1
      , noida
      Reviewed on Mar 25, 2019
    • Citibank Fixed Deposit
      "Its Good"
      0.5 3.0/5 "Satisfactory"
      I have converted saving maintenance into FD account for the term of one year. I can prolong period based on my convenience, the rate of interest is average for the fixed deposit. However I have online option to open and close the fixed deposit account at any time.
      Was this review helpful? 3
      , bangalore
      Reviewed on Mar 11, 2019
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