October 23, 2025 · 10 mins read
Santosh Kumar
FD-backed credit cards have become popular for individuals who are inexperienced with credit (in other words, looking to re-establish their credit history). FD credit cards provide the amenities of a credit card, while being secured by a fixed deposit you maintain with your bank. As the use of the card progresses, many cardholders begin to contemplate the option of increasing their FD credit card limit. The answer would be yes, within a few conditions. But there may be limits, depending on your repayment behaviour, the policies of your bank, and any particular amount in your fixed deposit.
This comprehensive guide outlines how FD credit card limits work, ways to increase these limits, conditions for eligibility to apply, and what to consider before requesting an increase.
An FD credit card is a secured credit card issued against a fixed deposit that you have with a bank. The bank holds your fixed deposit account as collateral and issues a credit limit on the card, usually 75% to 90% of the FD amount as a credit limit. Since the FD credit card is secured, it is not as hard to obtain compared to conventional cards, especially for those with no credit or a poor credit history.
Raising your FD credit card limit can be useful in several ways -- access larger purchases, improve your credit utilisation ratio, and build a stronger credit score. A higher limit may also come in handy in an emergency or during a short period of increased expense.
Additionally, a higher limit shows credit bureaus that you have financial stability and are a responsible credit user. As you improve your credit behaviour, your bank may be more inclined in the future to turn your secured card into an unsecured card.
Banks can increase the FD credit card limit, but it is not done automatically. Below are situations in which the limit will likely be increased:
Increased Fixed Deposit Amount: The easiest way to increase the limit of your FD credit card is to increase the fixed deposit amount. Since the credit limit is tied to the fixed deposit, an increase in the fixed deposit leads to an increase in your available limit.
Payment History: If the customer has been making the payments on time for a period of time, typically six months, the bank may consider the customer eligible for a limit increase. Responsible use of a credit card indicates good financial behaviour and reduces risk for banks.
Credit Score: Over time, if the customer's credit score has increased, then the customer may request that the bank review the credit limit for the FD credit card. Banks typically check the customer's CIBIL or Experian scores before increasing the limit.
Bank Review: Some banks conduct reviews and may pre-approve increases in the limit for customers who make on-time payments.
Also Read: Difference Between Annual Fee and Joining Fee
Although each institution has its own internal requirements, most institutions have similar practices when it comes to increasing a credit limit. Factors to consider include the following:
Minimum Usage Period: The card should have been in use for at least six to twelve months.
On-Time Payments: There should be no late payments, defaults, or usage over the limit.
Fractional Deposit Tenure: The FD or fractional deposit term should have adequate tenure left, ideally more than six months.
Customer Relationship: Long-time customers with multiple relationships (e.g., a savings account, loan, etc.) will see an expedited process.
No Outstanding Dues: Your card account must not have any unpaid bills or interest fees outstanding.
Also Read: Foreign Transaction Fees on Indian Credit Cards
To request a credit card limit enhancement for an FD account, please follow these instructions:
Visit Your Bank: Call customer support, log into your net banking, or visit the branch. Explain that you want your credit card limit to be increased.
Complete an Application: The financial institution may request that you complete a form or send a written request indicating your credit card information and the new limit.
Provide FD Information: You may need to provide documentation of your existing fixed deposit or create a new FD for more collateral.
Bank Assessment: The bank will evaluate your payment history, the FD commitment, and your credit history before making a final decision.
Decision and Notification: If approved, you will obtain notification and will see the new limit in your account within a few working shifts.
Also Read: Best Spending Categories to Earn Maximum Rewards
Before seeking an increase on your FD amount on a credit card limit application, consider the following:
Lock-in of Funds: The additional amount you deposit into your FD will be locked until maturity and will not be liquid.
Credit Utilisation Ratio: Even if your limit increases, you'll want to keep it at 30% to 40% of your total credit available to maintain a good credit utilisation and score;
Interest Rate on FD: Generally speaking, your FD should still earn a reasonable and higher interest rate;
Annual Fees: Some banks may charge you a fee to increase your credit limit;
Risk of Default: If you miss the payment, the bank could liquidate your FD; so only increase it to the level that you feel you can use responsibly.
Also Read: Should You Use a Credit Card for High-Value Purchases?
If you would rather not increase your fixed deposit (FD), there are still other ways to increase your card’s usage potential.
1: You can request the bank to review your account every six months or so to ask whether they can raise your limit based on your performance.
2: You can apply for a new credit card backed by another fixed deposit to use at the same or another bank.
3: You can also build a credit score through consistent repayment with the goal of qualifying for an unsecured credit card with a higher limit in future years.
Also Read: When to Convert Credit Card Payments into EMI?
Many customers of fixed deposit-backed cards move towards unsecured cards after simply establishing a solid track record. Once you demonstrate financial discipline, in addition to making regular payments, the bank may re-evaluate your account and offer to upgrade a secured card, removing the requirement for an FD, and providing the same limit or even a higher limit.
Keeping your utilisation low, avoiding payment opportunities, and keeping the account in good standing for the entire term are key takeaways in transitioning smoothly.
Banks use a risk-based approach to determine your credit card limit against your fixed deposit (FD) account:
Percentage of the FD: They give you a limit that is usually between 75% to 90% of the principal amount of your FD.
Tenure of the FD: Any short-term FD (less than six months) will not be accepted as collateral too often.
Customer Profile: Preference is given to existing customer accounts that have stable income or a good history of transactions.
Repayment Pattern: When you pay your dues consistently, it builds trust and allows you future flexibility.
Even if the limit is increased, it will never be more than 100% of your FD value, just so that the bank’s exposure is always covered.
Also Read: Online Shopping with Credit Cards – Safety Tips
If you increase your FD credit card limit, there are real benefits to be had.
1: It gives you more flexibility in spending, should you wish to avoid additional unsecured loans.
2: Your credit score gets better as a result of lower credit utilisation.
3: It shows the bank and credit bureaus that you are a reliable financial person.
4: You gain better access to offers, reward points, and travel benefits should your spending fall into the higher category.
5: It may even allow you to move up to premium credit cards.
Also Read: what is fd in credit card
Increasing your limit is not always advisable. For example, if you frequently carry a balance or tend to overspend, it may be best to avoid increasing your limit. While a higher limit may seem tempting, if you don’t manage it carefully, you may find yourself in significant debt. Additionally, if your FD is maturing soon or you’ll need cash shortly, it's prudent to hold off before locking in more money.
Absolutely, you can request a higher FD credit card limit by either raising your fixed deposit or requesting an increase from your bank once you have established responsible usage. Before you do so, you should consider your ability to pay any increased bill, as well as your financial needs and goals. Just remember that an increase in your credit limit should be considered a convenience and a means to improve your credit, not a reason to spend more.
By continuing to be disciplined, paying your bills promptly, and keeping your utilisation low, you are able to access the higher limit to your advantage and move closer to qualifying for an unsecured credit card in the future.
Also Read: how to get credit card against fd
Certainly, some banks may raise your limit based on your history of payments and credit. However, in most cases, you will have to increase the amount of money you have in your fixed deposit in order to increase the limit substantially.
Generally, after you are issued the FD limit, you should wait a minimum of six months. This allows the bank enough time to have consistent data on your repayment history and determine whether or not you are worthy of an increased limit.
A higher limit, if you responsibly spend on the card, could help your credit score as it lowers your credit utilisation ratio, which looks favourable in scoring.
Most banks don't charge a fee to raise your limit, although some will charge a small administrative fee or processing fee. Most wisely, check with your bank before proceeding, as they will confirm fees, if any.
Yes, your FD can act as collateral. If a failure to clear your outstanding dues occurs, the bank will be able to recoup the amount from your fixed deposit, whether the limit is increased or not.
Build and Maintain a 750+ Credit Score
