BANK­ING AT YOUR FIN­GER­TIPS

The un­cer­tain ben­e­fits of dig­i­tal bank ac­counts

India Today - - SMART MONEY - By Teena Jain Kaushal

For a grow­ing tribe of cus­tomers mar­ried to their smart­phones, banks have a new of­fer­ing: the dig­i­tal bank ac­count. It can be opened through an app on your smart­phone with­out the need to visit the bank’s branch. You can trans­act round the clock and also shop on­line. Get­ting started is sim­ple. Com­plete your Know Your Cus­tomer (KYC) for­mal­i­ties us­ing PAN and Aad­haar num­ber and you are on. A low­down on what dig­i­tal bank ac­counts of­fer.

Min­i­mum balance

Dig­i­tal bank ac­counts do not re­quire any min­i­mum balance. DBS Bank’s mo­bileonly ser­vice Di­gibank and Ko­tak Mahin­dra Bank’s ‘811’ dig­i­tal bank ac­count, which was launched last month, are two ex­am­ples. How­ever, if your mo­bile num­ber is not linked to your Aad­haar num­ber, Ko­tak will open an ac­count but re­quire you to main­tain a min­i­mum balance of Rs 10,000.

Charges

On­line money trans­fers (IMPS, NEFT and RTGS) are free. Dig­i­tal bank ac­counts also come with a free vir­tual Visa debit card. Some ser­vices, though, might in­vite a charge, just as for ac­count-hold­ers at any branch. For ex­am­ple, 811 ac­count-hold­ers pay a charge for hold­ing a phys­i­cal debit card that they can use at mer­chant out­lets. How­ever, the free ATM trans­ac­tions al­lowed are the same as for reg­u­lar ac­counts.

Trans­ac­tion limit

Dig­i­tal ac­counts may come with re­stric­tions on trans­ac­tions. For ex­am­ple, NEFT/RTGS through the branch may not be al­lowed. Cash with­drawal fa­cil­ity at the bank branch may be dis­al­lowed. For ex­am­ple, in Ko­tak’s 811 ac­count, only one cash de­posit per month up to Rs 10,000 is al­lowed. There­after, you are charged Rs 3.5 per Rs 1,000, the min­i­mum be­ing Rs 50.

In­ter­est rate

As per the RBI’s man­date, dig­i­tal bank ac­count-hold­ers en­joy the same rate of in­ter­est as cus­tomers with the bank’s branches. For in­stance, Ko­tak Mahin­dra Bank’s 811 bank ac­count of­fers an in­ter­est rate of 6 per cent per an­num for balance over Rs 1 lakh and up to Rs 5 crore. The rate of in­ter­est for balance un­der Rs 1 lakh is 5 per cent and 5.5 per cent for over Rs 5 crore. Branch cus­tomers en­joy the same rates of in­ter­est.

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