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Benefits Of Credit Card Against Fixed Deposits

Do you have a fixed deposit account? Congratulations as you are not only eligible for a loan against fixed deposit but even a credit card!

Yes, the facility of availing a credit card against your fixed deposit has opened up a newer possibility to even people who were eligible for a credit card.

If any of the ineligible people who were earlier rejected a credit card have a fixed deposit account, they can now apply for a credit card against FDs.

The only condition is that their FD (Fixed Deposit) amount should be between Rs.25,000 and Rs.25 lakh and should be fixed for a minimum of 180 days.

Benefits of a credit card against fixed deposit

Let’s provide you a slew of benefits that you get when you opt for a credit card against your fixed deposit.

  • No minimum income requirement: Unlike a normal credit card application process where an applicant needs to be earning a specific income, a fixed deposit holder doesn’t need to earn a particular income. The only condition is that you need to have a fixed deposit account with a minimum investment of Rs.25,00 and with a tenor not less than 180 days.
  • Easy documentation: You don’t need to furnish any more documents if you already have a fixed deposit account with a bank. You also don’t need to have a strong Credit Score or a clean repayment history to apply for a credit card, unlike a standard application. Even if you are a housewife or a newly joined employee with a fixed deposit scheme, you are eligible to avail a credit card against your fixed deposit investment.
  • A longer grace period: As compared to the conventional 21 days that one gets to pay his/her total outstanding amount or the minimum amount due, one gets around 48-55 days to clear the same. Hence, a credit card holder gets the convenience of a larger grace period to settle the debt and also don’t have to worry about in case he/she does not pay it. Why? Even if after reminders, a person does not settle his/her credit card bills, a card issuing company may settle the bill against the fixed deposit amount at their disposal.

The Bottom Line

Although a credit card against a fixed deposit is a win-win situation for a fixed deposit holder, they should use it with cautions.

Not paying the EMIs or bills on time may lead to coughing up of the fixed deposit amount and you may not get the benefits of the ROI for which you invested in an FD.

If you want to apply for a credit card against your fixed deposit, get in touch with your FD service provider today.

Before applying for the facility, go through all the associated terms and conditions carefully so that there are no issues or hassles in the future.

Modern finances have paved the way for many benefits these days, and this facility is just one fine example of it.