After HDFC Bank's most popular 10-second personal loan programme to its existing customers, Chennai-based Equitas Small Finance Bank has come out with a two-minute fixed deposit booking via Google Pay. In an industry first, Equitas Small Finance Bank (SFB) has made booking FD as simple as making a UPI payment for daily needs without having to open a bank account with the bank. Let's look at the two-minute process to book a fixed deposit.
Use your Google Pay App
You just have to open the Google Pay app on your mobile phone and go to 'Businesses and bills' option to search for Equitas Bank to open a fixed deposit. For those who may not know, Equitas Small Finance Bank, as the name suggests, is a new category of a bank licenced by the Reserve Bank of India for achieving financial inclusion objectives.
Unlike full-scale banks like SBI or HDFC Bank, Equitas is a small finance bank with permission to accept deposits. The lending is allowed, but 75 per cent of the loans have to be given to sectors classified as a priority sector.
Book a fixed deposit
Currently, there is only one option of Equitas Small Finance under Google Pay to book a fixed deposit. In the future, there will be many. You have to select an amount and tenure for the fixed deposit. You can transfer the money using your UPI-connected bank account. Currently, Equitas offers a fixed interest rate of 3.50 percent for 14 days and 6.35 percent for a year to 18 months.
The interest rates offered by small finance banks and some new generation private banks are generally higher than the well-established banks. It is always advisable to park your deposits with well-established banks as new banks are in the process of building a sustainable business model. A large loan book of small finance banks is currently in the unsecured and small loan segment, which is a bit risky as compared to the well-diversified loan book of well-established banks like SBI, HDFC, and ICICI Bank.
The Reserve Bank of India's (RBI) know your client's (KYC) guidelines are strictly followed. You have to provide your KYC details (PAN number & Aadhaar number) digitally to Equitas Bank.
The seamless link with Google Pay is made possible by APIs built by fintech infrastructure provider Setu for the bank. This functionality will be available for Google Pay users who are accessing the app from Android.
Get money in bank account on maturity
On maturity, principal and interest of fixed deposit will go directly to Google Pay users' existing bank account. People also get an option of premature withdrawal just in case the depositor needs money before maturity.
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