FD-backed credit cards explained: The safest way to start your credit journey?

Credit cards are tools that help in making spending easier and financial management more efficient. Still, getting approved for a credit card can be extremely difficult, especially if you are new to credit or have an irregular income.

In all such cases, FD-backed credit cards, also called credit cards against fixed deposits, provide applicants a safer and fairly reasonable way to secure and use a credit card. These cards are secured with the applicant’s fixed deposit, thus making them easier to obtain. Not only this, but these credit cards can also assist in building a clean credit history with sincere repayments.

Jitin Bhasin, Founder and CEO, SaveIN, says, “FD‑backed credit cards are the ultimate win‑win for first‑time card users and banks. With standard approval rates stuck at 25–30%, these cards convert a fixed deposit into a credit limit, usually 80–90% of its value. You continue earning FD interest while spending. For lenders, it’s near zero-risk compared to typical delinquency levels, which explains the surge in co-branded FD cards. For beginners, it’s the safest and most efficient entry point.”

How FD‑backed cards work

When you open a fixed deposit with a bank, you can apply for an FD‑backed card. The bank marks a lien on your FD, which acts as collateral. Your credit limit is usually 80–90% of the FD amount. The good news: the deposit continues earning interest while you use your card. If a payment is missed, the bank can recover the dues by redeeming the FD.

Why FD‑backed cards make sense

FD‑backed cards are perfect for those starting their credit journey. This is because they:

1. Provide easy approval without income checks or prior credit history.
2. Permit aspiring users to build and improve their credit score.
3. Generally charge lower fees and interest rates in comparison with unsecured cards.
4. Come with standard credit card perks such as cashback, rewards, and offers.

FD‑backed cards that aspirants can consider in 2026

Source: Paisabazaar.com

Note: The cards discussed above are illustrative in nature and may not reflect all offers or eligibility requirements.

Tips for responsible use

To maximise benefits, you should use these credit cards only for meeting essential payments rather than for luxury spending. Furthermore, ensure that you keep credit utilisation below 30%, pay bills on time, and track your credit score regularly.

In conclusion, FD‑backed cards are a smart and safer entry point into credit, allowing you to earn interest on your deposit while building a credit history, with minimal risk to banks and controlled exposure for you.

Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.