October 25, 2025 · 9 mins read
Santosh Kumar
Have you ever wondered if your fixed deposit might do more than just sit in your bank account earning interest? Can it really help you access credit, shop for what you require, and even pay in simple monthly instalments? Numerous individuals are ignorant that an FD, one of the most secure investment options, can also open the door to adaptable credit offices like EMIs. But how does this truly work, and can you really get EMI options on an FD-backed card?
Imagine having a credit card even if you don't have a strong credit history or normal pay verification. All you require is a fixed deposit. Sounds helpful, right? The concept of an FD-backed credit card brings together the best of both universes — security of reserve funds and adaptability of credit. The genuine question is, can you convert your purchases on such a card into EMIs, and if yes, what should you know before doing so? Let's get it step-by-step.
An FD-backed credit card, also known as a secured credit card, is issued against the amount you deposit as a fixed deposit in your bank. It acts as collateral for the card. In straightforward words, the bank gives you a credit limit based on the FD amount you vow, ordinarily around 80% to 90% of the amount.
For illustration, if you open a fixed deposit of ₹1 lakh, your bank may offer a credit card with a limit of ₹80,000 to ₹90,000. This limit works just like a typical credit card, permitting you to make purchases, book travel, pay bills, and even pull back cash, depending on the card’s features.
What makes it extraordinary is that the bank's risk is negligible since your FD is the security. Consequently, even individuals with limited or no credit history can get endorsed effortlessly. But the interest remains — can you utilise this card for EMI transactions?
The brief reply is yes, in most cases, you can. Numerous banks in India offer the option to convert purchases made using FD-backed cards into EMIs (Equated monthly Instalments).
Just like a customary credit card, these cards regularly come with a Simple EMI or Smart EMI highlight. Once you make a purchase, you can select to pay back the amount over a few months instead of settling it in one charging cycle. The amount is separated into instalments, along with a little interest or preparation fee, depending on the bank's policy.
However, not all FD-backed cards naturally offer EMI alternatives. A few banks confine this to include or apply certain conditions, such as a minimum buy amount, particular shipper categories, or restricted residency alternatives. In this manner, it's fundamental to check the terms and conditions before accepting your FD-backed card, which underpins EMI conversions.
Also Read: how to get credit card against fd
When you purchase something utilising your FD-backed card, the full amount is initially charged to your credit limit. After the exchange is total, you can ask to convert that buy into EMIs. The handle is, as a rule, speedy and can be done through your bank's app, site, or customer care. Let's get this with an example.
Suppose you have a secured credit card supported by an FD of ₹1 lakh, and your credit limit is ₹90,000. You buy a smartphone worth ₹45,000 utilising that card. If the bank permits EMI transformation, you can select to change over that ₹45,000 into EMIs — say over 6 or 9 months. You'll pay a little monthly instalment that incorporates both the principal and interest components.
Meanwhile, your fixed deposit remains intact and proceeds to gain interest. You don't need to exchange your FD or lose its benefits. Only if you come up short to make convenient instalments does the bank recover the amount by altering it against your FD.
Also Read: benefits of fd credit card
FD-backed credit cards offer a few highlights that make them attractive, particularly for first-time credit users.
Credit limit based on FD Value: The card's limit, as a rule, ranges between 80% to 90% of your FD value.
Interest Gaining Continues: Your FD proceeds to gain interest even in spite of the fact that it’s pledged.
No Salary proof required: Most banks don’t require salary slips or pay explanations since the FD itself secures the card.
Flexible Residency Options: EMI periods regularly extend between 3, 6, 9, 12, or even 18 months, depending on the amount and bank policy.
Lien on FD: While the FD is vowed, it cannot be rashly pulled back until all levies are cleared.
Also Read: Is a credit card against FD good for credit score?
While it's easier to get an FD-backed card than a normal one, you still need to meet certain criteria:
1: You must hold a substantial fixed deposit with the issuing bank.
2: The FD should not be a tax-saving deposit since those cannot be rashly closed.
3: The deposit should be in your title, not held together in most cases.
4: The least FD amount by and large begins from ₹10,000 to ₹20,000, depending on the bank.
5: The deposit residency should ordinarily be at least six months to one year.
6: Once these conditions are met, applying for the card is ordinarily hassle-free.
Getting an EMI office on your FD-backed card includes a few basic steps:
Create a fixed Deposit: Open a fixed deposit account with the bank and deposit the required amount.
Apply for the Credit Card: Once your FD is dynamic, apply for an FD-backed credit card.
Activate and Utilise the Card: Use the card for purchases, just like a normal credit card.
Select Residency and Confirm: Choose the EMI residency that suits your budget — ordinarily 3 to 18 months — and affirm the request.
Repay Monthly: The EMIs will consequently reflect in your card explanation, and you'll be required to pay them each month by the due date.
If you default, the bank can sell your FD to recover the extraordinary amount.
Also Read: Is a FD credit card good?
Let's look at why this choice can be appealing:
1: Easier access to Credit: If you have no earlier credit history or are having trouble getting a standard credit card, an FD-backed card is a great option.
2: Hold Your Investment: Unlike breaking an FD for pressing needs, this setup permits you to keep earning interest while utilising credit. It's a Smart way to meet costs without touching your savings.
3: Adaptable repayment with EMIs
4: Build Credit Score
5: Reward points and Offers
6: No income or salary proof required
Since your FD ensures repayment, banks frequently skip the long pay proof process.
Also Read: What credit card has no annual fee for students?
1: Lien on FD: Once the FD is promised, you cannot pull it back until the card and all contributions are cleared. It decreases liquidity.
2: Interest and Preparing Charges
EMI offices come with interest and preparation expenses. Whereas a few offers claim "no-cost EMI," there may still be hidden costs or GST on fees.
3: Restricted Eligibility
4: Default Risk: Don't miss the payments.
5: Effect on Credit Limit: When you convert a buy to EMI, the comparing credit limit remains blocked for that amount until the EMIs are paid off.
6: Opportunity Cost: If the EMI interest rate is high, the overall cost may exceed the advantage of holding your FD.
Before changing over your purchases into EMIs on an FD-backed card, consider these key points:
1: Check if the EMI choice is accessible on your particular card type.
2: Read the preparation expense terms carefully.
3: Understand residency adaptability — a few banks limit EMI tenures.
4: Ask around about early closure expenses if you need to prepay the EMI before the term end.
5: Review the effect on your FD — guarantee it proceeds to win interest normally.
6: Track the instalment plan to avoid punishments and keep up your credit score.
Being careful of these variables will offer help you utilize your FD-backed card successfully and maintain a strategic distance from pointless charges.
Also Read: can i withdraw money from FD credit cards?
You might discover this alternative valuable in circumstances like:
1: You don't have a customary credit card but need to make a huge purchase.
2: You need to maintain a strategic distance from breaking your FD for crisis expenses.
3: You favour spreading high-cost instalments over a few months.
4: You are attempting to build or improve your credit score.
5: You need adaptability with ensured approval.
However, if you currently have access to cheaper advances or low-interest credit cards, an FD-backed card EMI might not be the most prudent choice.
Yes. Your FD proceeds to win interest as per the concurred rate, even though it's sworn to the bank.
No. The FD remains under lien and cannot be broken until all contributions on the card are cleared.
The bank may recover the extraordinary adjustment by selling your FD. Late instalments can also negatively affect your credit score.
Yes, most banks charge a little preparation fee and interest based on the EMI tenure.
Absolutely. Opportune repayment of EMIs and full card contribution make a difference in building or making strides in your credit score, which benefits future credit applications.
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