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Digital banks in India

Your full guide to digital and payment banks in India.

Compare a range of digital bank accounts in India

Name Product Monthly Account Service Interest Average Monthly Balance Fund Transfer
HDFC Bank Instant Savings
₹0
Up to 2% p.a.
₹0
N/A
Choose and open a new HDFC savings account instantly at the comfort of your home. All you need is a valid mobile number, Aadhaar, and PAN details to get started.
Kotak 811 Digital Bank Account
₹0
Up to 4% p.a.
₹0
IMPS, NEFT
Access essential banking services such as NEFT / IMPS transfers and virtual debit card payments, without having to complete a full KYC verification.
Indus Delite
₹0
Up to 6% p.a.
₹0
N/A
Receive a rewards-packed Platinum Plus debit card with this zero balance savings account and benefit from attractive cashback, deals, complimentary insurance, and more.
Jupiter Account
₹0
Up to 2.5% p.a.
₹0
IMPS, NEFT, RTGS, UPI
Take control of your finances with advanced spend analytics, live insights and more. Earn 1% cashback on all purchases with a free debit card.
Payzello
₹0
N/A
₹5,000
IMPS
Benefit from a host of banking and payments features, plus a three-in-one smart card with integrated debit, credit and forex functionalities.
Digibank Savings Account
N/A
Up to 4% p.a.
₹5,000
IMPS, NEFT, RTGS, UPI
Benefit from competitive interest rates, spend analytics and effortless payments with this fully digital savings account.
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What are digital banks?

Digital bank accounts, also called online or challenger bank accounts, are bank accounts that are managed entirely online through your smartphone or computer.

In India, there are two types of online banks: digital banks and payment banks. Payment banks are a new type of bank authorised by the Reserve Bank of India that can hold a limited amount of customer deposits and are restricted as to what type of products they can offer. Digital banks are full-service banks operating online that are launched by a traditional bank or in partnership with one.

What features do digital banks offer in India?

There are quite a few advantages to signing up with a digital bank:

  • Fast, online signup. You open your digital account completely online, including KYC. Accounts can be opened in minutes.
  • Low fees and high rates. Many digital bank accounts offer low or no fees, including no charges for not maintaining a minimum balance. Digital savings accounts also have high interest rates.
  • Cashback and rewards. A big advantage of app-based banks is they often have no fees for foreign currency transactions. This will help you save when online shopping from a site abroad when you’re travelling and sending money across the border.
  • Financial literacy and budgeting. With a digital bank, you can enjoy having your transactions automatically categorised, set limits to your spending and set a budget to keep your money on track.
  • Easy money transfers. Send money to friends in India and overseas.
  • Savings features. Not only can you get a great rate on your savings with a digital bank, but you can also get help by savings automatically. Some banks, such as PayZello, analyse your spending and puts money aside for you every day.
  • Insurance. Some accounts come with complimentary insurance covers such as personal accident insurance or travel insurance.

Digital banks vs payment banks

There are two types of online banks operating in India: payment banks and digital banks. There are a few key points of difference that you should be aware of between them.

Payment banks

Payment banks are a new type of bank authorised by the Reserve Bank of India. The main purpose of these banks is to promote social inclusion by making bank products more accessible to low income households, small businesses, migrants and other similar customers.

These banks are only able to offer certain products, including current accounts, savings accounts and debit cards. Payments banks cannot offer credit cards or loans.

While savings and current accounts are on offer, payment banks cannot hold a balance of more than Rs. 100,000 per customer.

Digital banks

Digital banks, also called neobanks and challenger banks, are digital-focused banks. These digital banks are usually launched by a traditional bank or in partnership with one and offer the full suite of banking products, including credit cards and loans.

There are no restrictions digital banks need to operate under.

What payment and digital banks are there in India?

There are a few online banks available in India, including:

  • Kotak 811. This is a digital account from Kotak Mahindra Bank which is designed to be managed entirely on your smartphone. You can open the account online instantly, benefit from a virtual debit card, enjoy no minimum balance requirement and earn up to 4% interest p.a. on your account balance.
  • Axis ASAP Digital Account. This digital savings account can be opened entirely online with secure video KYC. The account actually gives you the choice of four savings account variants so you can pick the one that best suits you. You will get a virtual debit card, cashback with Amazon and other major brands and discounts on dining and entertainment.
  • Digibank. Asian bank DBS offers Digibank, an entirely digital account you can manage from your smartphone. You can manage your account in the app plus link your other accounts to keep track of them all in one place. Using the account you can set money goals, budget plus see insights into your spending.
  • PayZello. This is a useful digital bank account that gives you a virtual card plus a smart card that can be switched between debit, credit and forex. You can get help with budgeting by setting spending limits and real-time expenditure tracking and also chat with the personal financial assistant Ello.
  • Airtel Payment Bank. The Airtel Payments Bank account lets you deposit and withdraw cash, recharge your mobile and DTH, pay your bills and more. There are some fees to be aware of, but you will not be charged for opening an account.
  • India Post Payment Bank. The payments bank from India Post is a useful digital account that requires no initial deposit to be opened. You can benefit from a number of features including free monthly e-statements and easy banking services with QR codes.
  • Paytm Payment Bank. Paytm calls itself “India’s most sincere bank”, offering savings accounts, current accounts and payment accounts. You can benefit from free virtual debit cards, no account fees, secure deposits and rates of up to 2.75% p.a. on your savings.
  • Gimi. This is a digital account and card designed for children and teenagers. This is a subscription account that helps parents manage their kids pocket money, track chores and teach kids financial skills.

How much do digital banks cost?

The fees and rates between digital banks differ. Usually, you will not be required to make a deposit to open your account and you may not be required to maintain a minimum balance. You may be charged for international payments and transfers. Digital bank savings rates also differ but can go as high as 4% p.a.

How many people use digital banks in India?

We conducted a survey to find out how many Indians are using a digital bank. Over the next year, 12% of Indian adults expect to take out a digital-only bank account and an additional 8% say they will take one out within the next five years. That means 40% of Indian adults, or an estimated 373 million people, will have a digital-only bank account by 2026.

While digital banking is set to rise over the next five years, this is actually slightly slower than anticipated compared to a similar survey conducted in March 2020. At the beginning of last year, roughly 22% of Indian adults had a digital bank account at the time, compared to 20% of Indian adults this year.

The five-year forecast for digital banking adoption has also slightly dropped from 43% to 40% over the next five years.

How to get started with an online bank

You can sign up with a digital bank in India by downloading your chosen bank’s app onto your smartphone. You will need a few of your personal details to sign up, including your full name, date of birth, address and email address. You will need to confirm your identity, usually with a video KYC, and may need to deposit funds into your account to make it active. Then, your bank account will be created.

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