Kotak811 Dream Different Credit Card

How does a Credit Card on Fixed Deposit work?

When you apply for a credit card against fixed deposit, the process is quite different from regular credit cards. Instead of the bank evaluating your income and credit history, they primarily look at your Fixed Deposit as security.

Once approved, your credit card functions exactly like any other credit card. You can use it for online purchases, bill payments, ATM withdrawals, and even international transactions. The key difference is that your FD remains linked as collateral.

Your monthly credit card bill needs to be paid separately - the bank doesn't automatically deduct from your FD. The Fixed Deposit is only used if you fail to pay your credit card dues after proper notice and procedures. As long as you pay your bills on time, your FD continues earning interest without any disruption.

This setup creates a win-win situation: you get access to credit without complex approvals, and your savings continue growing through FD interest.

Building your credit score with an FD Credit Card

One of the most valuable long-term benefits of having an FD credit card is how it helps establish and improve your credit score. Every transaction you make and every bill you pay on time gets reported to credit information companies like CIBIL.

Your credit score is calculated based on several factors, with payment history being the most important. By consistently paying your credit card bills on time, you demonstrate financial responsibility. The length of your credit history also matters, so starting early with an FD credit card gives you a head start.

Many people use FD credit cards as stepping stones. After using one responsibly for 6-12 months, they often find it easier to qualify for regular credit cards with higher limits or better rewards. Some continue using both types - the FD credit card for building credit and regular cards for specific benefits.

The key is to use the card regularly but responsibly. Make small purchases, pay the full amount by the due date, and keep your utilisation below 30% of the credit limit. These habits will steadily improve your credit score over time.

Things to know before applying for an FD Credit Card

Before you apply, there are several important considerations that can help you make the right decision and avoid common pitfalls.

First, understand that your Fixed Deposit will be locked as long as the credit card is active. You cannot withdraw or modify the FD without first closing the credit card and clearing all dues. If you think you might need access to that money soon, you may want to consider using only a portion of your savings for the Fixed Deposit.

Second, while the approval process is easier, you still need to use the card responsibly. Late payments will attract penalties and can negatively impact your credit score. The interest rate on outstanding balances is typically higher than what your FD earns, so carrying a balance can be costly.

Third, consider starting with the minimum required FD amount to test how well you manage the credit card. You can always link additional FDs later to increase your limit if needed.

Finally, understand all the fees and charges upfront. While many FD credit cards have lower fees than regular credit cards, there are still costs for cash withdrawals, late payments, and foreign transactions.

Eligibility Criteria 

• Age Requirement: 18 to 75 years for primary cardholders, 18+ for add-on cardholders. 
• Minimum FD Amount: ₹10,000 with a minimum tenure of 181 days. 
• Indian Residents Only: NRIs can apply via offline process only. 
• Eligible FDs: Individual Term Deposits only. 
• Excluded FDs: Tax Saver, NRI, Sweep-in, Non-Withdrawal, and Minors' FDs. 
• PAN Requirement: PAN must be updated and operative. 

Fees & Charges 

• Interest Charges: 3.75% per month (Annualised 45%). 
• Foreign Currency Markup: 0.035%. 
• Late Payment Charges: ₹500 for dues of ₹100 or more. 
• Processing Fee for Cash Withdrawal / Fund Transfer: ₹100 per instance. 
• Over Limit Charge: Nil. 
• Rent Payments: 2% of the transaction amount + GST (effective 15th April 2024 for new cardholders and 1st June 2024 for existing cardholders). 
• Pre-closure Charges: 3% on outstanding principal of personal loan on credit card. 

How to apply for a Credit Card Against FD?

Applying for your FD credit card with Kotak811 is simple and fully digital. You can apply for the Credit Card Against FD in two ways: 

• Kotak811 Mobile Banking App: Log in to the Kotak Bank 811 Mobile Banking App, navigate to the Credit Card section, and follow the steps to apply.
• Website: Visit the Dream Different Credit Card Page on Kotak811 website, click on 'Apply Now', and share your details.

With Kotak811, you can apply for a FD credit card online. This FD backed credit card is perfect for those looking to build credit, enjoy flexibility, and gain access to premium benefits.

If you are not an existing 811 customer, simply open 811 savings account or download the 811 mobile banking app and proceed with the credit card application.

Step-by-Step application guide

Step 1: Prepare your Fixed Deposit 

If you don't already have an FD with Kotak811, you'll need to create one first. The minimum amount is ₹10,000 with a tenure of at least 181 days. You can open this online through the mobile app or website.

Step 2: Gather required information

While minimal documentation is needed, have your PAN card details ready. Make sure your PAN is linked and operative. If you're a new customer, you'll also need to complete your KYC.

Step 3: Choose your application method

You can apply through the Kotak811 App (if you're an existing customer) or through the website. The mobile app process is typically faster and more convenient.

Step 4: Link your Fixed Deposit

During the application, you'll select which FD(s) you want to link to your credit card. Remember, you can link multiple FDs if you want a higher credit limit.

Step 5: Review and submit

Double-check all details before submitting. The application is usually processed quickly since your FD serves as security.

Step 6: Card delivery and activation

Once approved, your card will be delivered to your registered address. Follow the activation instructions provided with the card.

Managing your FD Credit Card effectively

Getting the card is just the first step - using it wisely is what matters for your financial health. Here are some practical tips for making the most of your FD credit card. 

Set up automatic bill payments to avoid late fees and protect your credit score. Even if you sometimes forget, auto-pay ensures your minimum payment is always made on time. 

Use the card for regular small purchases rather than keeping it unused. Credit bureaus like to see regular activity, but keep your spending well below the credit limit - ideally under 30%. 

Take advantage of the UPI functionality for everyday transactions. This means you can earn credit card rewards on purchases where you might normally use cash or debit cards. 

Monitor your statements regularly through the mobile app. This helps you track spending patterns and quickly spot any unauthorised transactions. 

Consider linking additional FDs if your credit needs grow, but only if you can manage the higher credit limit responsibly. 

Why choose Kotak811 Dream Different Credit Card against FD? 

Get more out of your fixed deposit with Kotak811 Dream Different Credit Card: 

• Tap into instant credit while your FD continues to earn interest. 
• Build your credit score without income proof or salary slips. 
• Skip the paperwork with an easy online application process. 
• Save more with zero annual fees. 
• Earn rewards, milestone vouchers, and surcharge waivers as you spend. 
• Strengthen your financial profile by opting for a credit card against FD. 

Apply today through our website or the Kotak Bank 811 Mobile Banking App and start enjoying the benefits of your FD credit card!