Google has joined hands with fintech company Setu to allow its users to open fixed deposits (FDs) through Google Pay.
Initially, the FDs of Equitas Small Finance Bank will be offered for a period of one year carrying a maximum interest rate of 6.35%.
Aadhaar-based KYC (know your customer) through a one-time password (OTP) will be a requisite for users to open the FDs, Mint has reported. Setu, which specialises in providing application programming interfaces (APIs), has already set up a beta version for the API.
"The beauty of the system is that you can book an Equitas FD on Google Pay even if you do not have a savings account in Equitas Small Finance Bank. The money will flow out of your existing account and back into your existing savings account. Other banks, including Ujjivan Small Finance Bank and AU Small Finance Bank, are also in the pipeline. If successful, the system will also be extended to other payment apps," a source told the publication.
"While attention is usually focused on mutual funds and stocks, FDs are the largest component of savings in India. They are largely overlooked," the source added.
The beta version of the API offers FDs of several tenors comprising 7-29 days, 30-45 days, 46-90 days, 91-180 days, 181-364 days, and 365 days, with interest rates varying from 3.5% for the shortest FD to 6.35% for the one year-FD.
Google Pay, as per media reports, has 150 million active users in India.
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