How Paytm stacks up against other payments banks

Paytm Payments Bank Ltd on Tuesday rolled out its banking operations. With the launch of Paytm Payments Bank, there are now three payments bank in the country, including Airtel Payments Bank Ltd and India Post Payments Bank Ltd.

Payments bank is a differentiated bank which allows customers to open a savings account for a deposit amount of up to ₹1 lakh.

Here is a look at the products and services all the payments banks offer and what you should know before you opt for it:

INTEREST RATE

Paytm Payments Bank is offering 4% on the savings account. Airtel Payments Bank is giving 7.25% while India Post Payments Bank is providing 5.5% interest on deposits depending on the amount.

Paytm Payments Bank’s interest rate is in line with all the large commercial banks, including State Bank of India, Bank of Baroda and ICICI Bank Ltd, which continue to offer 4% interest rate on savings account deposits.

India Post Payments Bank is offering three kinds of accounts: one regular and two basic savings bank accounts.

CASH WITHDRAWAL CHARGES

For most payments banks, there is a cash withdrawal charge. Paytm Payments Bank’s cash withdrawal charges using the ATM is similar to any other major bank of the country. You get five free transactions in non-metro cities and three free in a metro city, after which you will be charged ₹20 for each cash withdrawal and ₹5 for non-financial transactions. In case you need a physical statement from the bank, you will have to pay ₹50 plus delivery charges; additional service tax will also be applicable.

Airtel Payments Bank will charge 0.65% of the withdrawal amount if you withdraw cash from a banking point. India Post Payments Bank will not charge any fee if you withdraw money using an ATM card at India Post Payments Bank ATM or Punjab National Bank ATM.

DEBIT CARDS

Paytm Payments Bank will provide Rupay debit card to its customers at an annual subscription cost of ₹100 plus delivery charges.

India Post Payments Bank is offering free debit cards, but you will be charged ₹100 if you take add-on cards or a new card in case of theft or loss.

ONLINE TRANSFER

Paytm Payments Bank will provide online fund transfer services such as Immediate Payment Service (IMPS), Unified Payment Interface (UPI) and National Electronic Fund Transfer (NEFT) free of cost.

India Post Payments Bank will charge a fee if the transaction happens at the branch or as part of doorstep banking— NEFT will cost ₹2.5-5, while IMPS transaction will cost ₹5. If you do it using mobile banking, NEFT is free, but you have to pay ₹4 per transaction for IMPS. Airtel Payments Bank charges 0.5% of the transferred amount if you transfer funds from Airtel Payments Bank to an external bank account.