Credit history remains a major obstacle for many Indians looking to start their financial journey. Traditional credit cards often require applicants to demonstrate income stability or an established credit profile—criteria that can be challenging for fresh graduates, gig workers, homemakers, or those with modest salaries. Enter UPI-linked credit cards backed by fixed deposits (FDs): a solution designed for newcomers to credit, fostering a healthier borrowing culture and easier financial access.
What Are UPI Credit Cards Linked to Fixed Deposits?
UPI credit cards linked to fixed deposits, sometimes called ‘secured UPI credit cards,’ combine the convenience of UPI payments with the accessibility of FD-backed credit. In short, you open a fixed deposit with a participating bank or fintech, which acts as collateral for your new credit card. The credit limit is usually set as a percentage of your FD—often up to 90%—offering a risk-mitigated way for issuers to grant cards to individuals without a prior credit history.
How Do FD-Backed UPI Credit Cards Work?
- Apply easily online: Most banks and fintechs allow you to apply for a credit card online after opening a fixed deposit. No income documents or high credit score is needed.
- Set your own limit: Your spending cap is directly tied to your FD balance. For example, an FD of ₹20,000 may fetch you a credit card limit of ₹18,000.
- Use your card on UPI: You can link these cards to UPI apps like Google Pay, PhonePe, and Paytm for instant QR or UPI payments, turning your credit card into a universal payment tool.
- Repay as usual: Settle monthly credit card dues just like a regular card. If you default, the bank has the FD as security.
Why Is This Model Gaining Popularity?
The RBI’s green light for RuPay credit cards on UPI has opened this space to millions of Indians. These FD-linked products bridge the gap between debit and credit, letting new borrowers experience credit responsibly. Features include:
- Instant credit card approval: Bypasses delays due to credit checks.
- Helps build credit score: Each successful repayment adds to your credit history, improving your eligibility for bigger loans in future.
- No income proof required: Immensely helpful for first-time earners, students, homemakers, and freelancers.
- Wide UPI acceptance: Pay on any UPI QR, both online and in physical stores.
- Secured yet flexible: FD remains yours and keeps earning interest.
Popular FD-Backed UPI Credit Card Options in India
Banks and new-age credit fintechs have joined this revolution. Here’s a look at some available offerings:
- Federal Signet RuPay Credit Card: Secure with a fixed deposit of as low as ₹10,000, usable on UPI, with attractive reward programs for every spend.
- Kiwi RuPay Credit Card: Directly links to UPI apps and provides 2% rewards on every payment. Ideal for frequent QR and UPI users.
- Jupiter RuPay Credit Card: Easy instant issuance when you set up a fixed deposit and rich cashback rewards on regular usage.
- Many other public and private banks are launching secured RuPay cards compatible with UPI. Terms vary so be sure to compare credit cards and their benefits before you pick.
Advantages for First-Time Borrowers
- Zero annual fee card options: Many secured UPI cards waive annual fees or keep them very low.
- Full UPI and offline use: Shop anywhere credit cards are accepted or scan UPI QRs at local merchants.
- Improved credit management habits: Learn responsible repayment with a low-risk product backed by your own FD.
- Reward programs included: Earn cashback or points on every purchase and UPI transaction. See offerings like the Federal Signet RuPay or Kiwi card.
- Flexible upgrade paths: Once you build your score, you can switch to unsecured credit cards with higher limits and premium benefits.
Potential Limitations and Things to Watch Out For
- Lower credit limit: Your spending power is tied to the FD you create, so it may not suit heavy spenders from day one.
- No partial FD release: Many issuers don’t let you break the FD or reduce the FD size until the card is closed or upgraded.
- Interest not earned on unpaid balances: Pay full due every month, or you’ll be charged standard credit card interest on outstanding amounts—even though your FD is collateral.
- UPI compatibility limitation: Not every credit card brand is presently UPI-enabled. Always check for RuPay badge for full UPI access.
How to Apply for a UPI FD-Backed Credit Card
- Visit the issuing bank/fintech’s site or app.
- Open a fixed deposit of the minimum required amount. Keep KYC and PAN handy.
- Request the credit card linked to your new FD. Complete digital onboarding and set PIN.
- Link your RuPay credit card to your UPI app (Google Pay, PhonePe).
- Start using your card for UPI, online, or in-store purchases. Repay dues on time to unlock credit growth.
Comparing UPI FD-Backed Credit Cards
| Product Name | Minimum FD | Annual Fee | UPI Enabled | Rewards |
|---|---|---|---|---|
| Federal Signet RuPay | ₹10,000 | ₹0-500 | Yes | 1-2% cashback/points |
| Kiwi RuPay | ₹5,000 | ₹0-300 | Yes | 2% rewards |
| Jupiter RuPay | ₹10,000 | No annual fee | Yes | Cashback offers |
Building Credit Score with UPI + FD Credit Cards
Every timely payment on your secured UPI credit card is reported to credit bureaus, helping you steadily grow your credit profile. This opens future access to larger unsecured cards, personal loans, and even home loans. Monitor your score regularly and never miss payment deadlines to make the most out of your FD-backed card.
FAQs: UPI Credit Cards Linked to FDs
1. Who should consider an FD-backed UPI credit card?
Anyone without a stable income or poor/no credit history—students, freelancers, freshers, gig workers—can use these cards to responsibly start building their financial record.
2. Are FD-backed cards eligible for the same benefits as normal cards?
Most secured UPI credit cards offer the same payment convenience, rewards, and UPI compatibility as their unsecured counterparts. The main difference is your spending limit, which depends on your FD size.
3. Can I break my FD if I need emergency funds?
Generally, you can break the FD, but the card account will automatically be closed—pending dues will be recovered from the FD, and you’ll lose card privileges. Some banks allow partial withdrawals, but check specific terms before signing up.
4. How soon can I upgrade to a regular, unsecured card?
If you pay your dues on time for 6–12 months, many issuers will offer to upgrade you to a standard credit card with a higher limit and more benefits. Keep an eye on your credit score improvements as well.
5. Which UPI apps support RuPay credit cards?
Popular apps like Google Pay, PhonePe, Paytm, and others now allow you to link RuPay credit cards for UPI merchant transactions. Check current UPI app features as new integrations are rolled out frequently.
Start Smart on Your Credit Journey
UPI credit cards linked to FDs are opening the doors for millions to experience safe, responsible credit, and enjoy digital payments—no matter their background or employment status. If you’re ready to get started, compare the best credit card options for first-time users or read more on our latest credit card reviews. Building your credit profile is easier—and safer—than ever.