{"id":15997,"date":"2025-09-28T02:38:19","date_gmt":"2025-09-28T02:38:19","guid":{"rendered":"https:\/\/tezgyan.com\/index.php\/2025\/09\/28\/what-is-an-fd-backed-credit-card-and-how-can-it-boost-your-financial-flexibility-savings-and-investments-news\/"},"modified":"2025-09-28T02:38:19","modified_gmt":"2025-09-28T02:38:19","slug":"what-is-an-fd-backed-credit-card-and-how-can-it-boost-your-financial-flexibility-savings-and-investments-news","status":"publish","type":"post","link":"https:\/\/tezgyan.com\/index.php\/2025\/09\/28\/what-is-an-fd-backed-credit-card-and-how-can-it-boost-your-financial-flexibility-savings-and-investments-news\/","title":{"rendered":"What Is An FD-Backed Credit Card And How Can It Boost Your Financial Flexibility? | Savings and Investments News"},"content":{"rendered":"


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An FD-backed credit card is a financial product linked directly to an FD, which acts as collateral to secure the cardholder\u2019s credit limit<\/h2>\n
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FD backed credit card
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An FD-backed credit card is a financial product linked directly to a fixed deposit (FD), which acts as collateral to secure the cardholder\u2019s credit limit. By leveraging a fixed deposit, these cards offer a safer borrowing experience compared to unsecured credit cards, making them particularly useful for individuals with limited or no credit history. Lending institutions issue such cards only after verifying the fixed deposit, ensuring the loan is fully backed.<\/p>\n

How Do FD-Backed Credit Cards Work?<\/h3>\n

When you pledge a fixed deposit to a bank, you gain access to a credit limit, typically ranging from 70% to 90% of the FD amount. Importantly, the FD remains intact and continues to earn interest while serving as security.<\/p>\n

If you miss credit card payments, the bank can recover dues by encashing the FD. Otherwise, the card works like a regular credit card, allowing you to manage day-to-day expenses and bill payments.<\/p>\n

Key Benefits of FD-Backed Credit Cards<\/h3>\n
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  1. Easier Approval:<\/strong> Collateral reduces the need for a strong credit score.<\/li>\n
  2. Interest Earnings:<\/strong> The fixed deposit continues to earn around 6\u20137% per annum, even while securing the card.<\/li>\n
  3. Credit Building:<\/strong> Timely repayments help build or rebuild your credit history.<\/li>\n
  4. Lower Interest Rates:<\/strong> Reduced risk translates to lower interest rates than unsecured cards.<\/li>\n
  5. Rewards and Offers:<\/strong> Cardholders can enjoy cashback, rewards, and other benefits.<\/li>\n<\/ol>\n

    Who Can Benefit?<\/h3>\n

    FD-backed credit cards are ideal for:<\/p>\n