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Top 3 Credit Cards Against Fixed Deposits in India

Top-3-credit-cards-against-fixed-deposits

There is no denying that a fixed deposit is one of the safest and most reliable investments for people in India. It provides them with a steady stream of income that can be used to fund their daily needs or large expenditures, especially one like Shriram Fixed Deposit.

Saving goes hand in hand with spending for expenses. Credit cards have become increasingly popular for those looking for a convenient option for their spending needs. Credit cards offer more flexibility, higher rewards and bonus points compared to debit cards.

Let us discuss the top 3 credit cards against fixed deposits, so you can decide which one is right for you.

What are credit cards against fixed deposits?

Credit cards against fixed deposits are a type of credit card that allows you to use your fixed deposit as collateral for the credit line. This can be a useful option if you have a fixed deposit but intend not to break it.

SBI Unnati Credit Card

The SBI Unnati card is offered on a fixed deposit account with SBI exceeding ₹25,000. Features of this card include: 

  • Waived annual fee for 4 years
  • 1 reward point for every ₹100 spent
  • Cashback of ₹500 for spending over ₹50,000 in a year
  • Fuel surcharge waiver
  • Balance transfer to other bank credit cards
  • Up to 80% cash advance limit

ICICI Bank Coral Credit Card

This credit card is offered against a fixed deposit of ₹30,000 or more with ICICI Bank. The features of this card include the following: 

  • Double reward points for dining, grocery and supermarket shopping spends
  • 1 payback point for spending ₹100 on utilities
  • 2 free complimentary movie tickets using the partner portal
  • Save up to 15% on restaurant spending across India
  • Complimentary airport lounge access at select airports

Axis Bank Insta Easy Credit Card

This credit card is offered against a fixed deposit of ₹20,000 and above with Axis Bank. The features of this card include the following: 

  • Interest-free credit period up to 60 days
  • Credit limit of up to 80% of the FD amount
  • Allowance of cash withdrawal up to 100% of the credit limit
  • Up to 20% off with select dining partners through the Delights program
  • 1% fuel surcharge waiver
  • Global emergency assistance services

How to Choose the Right Credit Card Against an FD?

There are a few things to consider when choosing the right credit card against a fixed deposit in India:

  1. Interest rate: The interest rate on a credit card is essential to consider when choosing the right card against a fixed deposit. You will eventually pay more in interest if the interest rate is higher.
  2. Annual fee: Another critical factor to consider is the annual fee. Some credit cards charge a yearly fee, while others do not. If you plan to use your credit card regularly, choose a card with no annual fee.
  3. Reward programs: Many credit cards offer rewards programs, such as cashback or points for every purchase made. If you think you will use your credit card frequently, choosing a card that offers rewards may be worth choosing.
  4. Credit limit: Your credit limit is the maximum amount you can borrow from your credit card company. When choosing a credit card, choose one with a high enough limit to cover your needs.

Benefits of a Credit Card Against a Fixed Deposit

  • Earning rewards points: Most credit cards offer rewards points on every purchase, which can be redeemed for cashback or other prizes.
  • Building credit history: Using a credit card responsibly can help build a positive credit history, which can be beneficial in the future.
  • Convenient payment option: Credit cards are accepted at most merchants and online retailers, making them a convenient payment option.

Disadvantages of a Credit Card Against a Fixed Deposit

  • You may be tempted to spend more than you can afford if you have a higher credit limit than your fixed deposit balance. It is better to save in the form of a fixed deposit and get a loan against the FD to help with your sudden financial needs.
  • If you don't pay your balance in full each month, you will be charged interest on the outstanding balance. This can add up quickly and offset any advantage of using a credit card over paying with cash.
  • If you miss a payment or are late, you may be charged additional fees by the credit card issuer. This can also damage your credit score.

How to Apply for a Credit Card Against a Fixed Deposit?

If you are looking to apply for a credit card against a fixed deposit, there are a few things you need to know. Here is a step-by-step guide on how to apply for a credit card against a fixed deposit:

  1. Research about different credit cards: Before starting the application process, it is important to research and compare different credit cards. Consider factors such as the interest rate, annual fee, and other features before deciding.
  2. Meet the eligibility criteria: Each bank has its own criteria for issuing credit cards. Make sure you meet all the requirements before proceeding with the application process.
  3. Fill out the application form: Once you have chosen the right credit card and met all the eligibility criteria, you can complete the application form. Make sure to provide accurate information and documents required by the bank.
  4. Await approval: After you have submitted your application form, you have to wait for approval from the bank. If everything goes well, you should receive your new credit card within a few weeks!

Takeaway

Fixed deposits are one of the most popular investments for Indians. Credit cards are a great way to get rewards and cashback on purchases. Credit cards against fixed deposits offer a unique opportunity to maximise your investment options. To find which investment option would be the best for you always make sure to calculate your returns before you make an investment.

With the aforementioned top 3 options at your disposal, choosing a card that suits your needs and enables you to take advantage of the investment opportunities available with FDs is easy. If you are looking to invest in a secure FD, invest now in Shriram Fixed Deposit to earn higher interest rates on your investment. 

FAQs

  1. How do credit cards against fixed deposits work?

The bank will place a lien on your fixed deposit when you take a credit card against a fixed deposit account. The bank can use your fixed deposit as collateral for the credit line. The credit limit on your card will be based on the amount of your fixed deposit.

  1. What are the benefits of credit cards against fixed deposits?
  • You can use your fixed deposit as collateral without liquidating it. 
  • The interest rate on your credit line will be lower than that on a personal loan. 
  • You will have access to emergency funds if you need them. 
  • Your credit score will not be impacted by taking a credit card against a fixed deposit account.
  1. Will my fixed deposit be safe as I use a credit card against a fixed deposit? 

As long as you pay your credit card bill on time, the interest rate on your fixed deposit will not be affected by using a credit card.

  1. Will my credit score be impacted if I use a credit card against my fixed deposit? 

Your credit score will not be impacted if you use a credit card against your fixed deposit. This is because the interest rate on the variable portion of your debt is lower than the interest rate on your fixed deposit, so this would not affect the overall amount of debt you owe.

Key Highlights

  • Credit cards have become increasingly popular for those looking for an investment that offers more flexibility, higher interest rates and rewards.
  • Credit cards against fixed deposits offer a wide range of features and benefits that can be extremely useful for customers. 
  • Disadvantages of using a credit card against a fixed deposit include overspending and poor cash management. 
  • Before applying for a credit card against an FD, it is important to research and compares different credit cards. Consider factors such as the interest rate, annual fee, and other features before deciding.
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