Using Your Savings to Unlock a Credit Line: How It Works

PNN
New Delhi [India], May 29: If you seek access to credit and are concerned about eligibility, your savings can ease the pressure. The money you've already set aside in your fixed deposit can help you unlock a credit line. You can use it as a backup for getting a credit card. Meanwhile, your savings continue to earn interest. Learn how this works in this detailed article.
Benefits of Using Savings to Access Credit
Tapping into the potential of your savings with an FD-backed credit card leads to the following advantages:
- Ease of building credit: An FD-backed credit card is a great place to start your credit-building journey. The application process is simplified and ideal for beginners.
- Dual use of savings: Your savings can do more when you avail of credit. Your FD continues earning interest while you get access to funds/credit.
- Disciplined usage: You learn about the importance of clearing your credit bills on time and how they affect your credit history, which leads to financial discipline.
- Hassle-free access: With an FD credit card, you can easily avail of the credit line and start your credit-building journey without a high score or income stability.
- Useful during emergencies: If you need access to credit quickly and do not want to go through a lengthy eligibility process, an FD-backed card offers a simpler route.
Key Features of an FD-Backed Credit Card
The specialised FD credit card makes credit accessible to anyone with a fixed deposit. A few of its distinct features are outlined as follows:
- Credit limit linked to a deposit: The credit limit you get is a percentage of your total deposit in an FD. It can range anywhere between 80%-100% of the FD value. IDFC FIRST Bank, for instance, offers a min. credit limit equal to 100% of your FD value, so your full deposit works for you.
- FD as collateral: Card issuers use your FD as collateral, which reduces their lending risk and makes approval more straightforward. This allows you to get started with a credit card even without a strong credit profile.
- Simplified eligibility: Since the risk for the provider is lower, the application process is simplified. All you need is an FD with the minimum deposit amount, Aadhaar credentials, and PAN for KYC.
Benefits of a Regular Credit Card
Despite being easier to obtain, the FD credit card comes with the same features as regular credit cards, like rewards, merchant discounts, and complimentary benefits.
Continued earnings on the FD: Your FD continues to earn returns at the predetermined rate. Borrowing against it doesn't affect the savings growth.
The Process of Availing of an FD-Backed Credit Line

You can apply for an FD credit card with three simple steps on the IDFC FIRST Bank portal or mobile app.
1) Register and verify details: Enter basic information like your name as per Aadhaar, date of birth, mobile number, and verify with an OTP.
2) Create or link FD: Pick the FD account of your choice and fund it with the minimum required amount to qualify for the credit card against the FD (differs based on variant).
3) Complete the KYC process: The final stage in your application is a video KYC where you display your original PAN card.
Final Words
An FD credit card is a practical option for anyone who wants access to credit without meeting traditional income or credit score requirements. Whether you are a student, a homemaker, or self-employed, your eligibility is based on what you already have in your fixed deposit, not your income history.
Once approved, you can use the credit card for everyday spending, converting large purchases into EMIs, and earning rewards on eligible transactions. Pay your bills on time each month and keep your spending within your repayment capacity. These habits build a strong credit history from the very start.
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