Paytm Payments Bank Offers 4% Interest and Cashbacks – Should you opt for it?
Paytm Payments Bank – Should you opt for it?
Paytm yesterday has launched Paytm Payment Bank which offers cashback on deposits and several other good features. Paytm mobile wallet has gained popularity considering the flexibility and simplicity in its usage. Paytm Payment Bank is the third bank where it got approval from RBI after Airtel Payment Bank and India Post Payment Bank. What are the features of Paytm Payment Bank? How to open Savings Bank Account in Paytm Payment Bank? What does an investor get out of this?
What is Paytm Payment Bank?
If you are already aware of it, you can skip this section.
Paytm Payment Bank is the conversion of paytm digital wallet to licensed bank from RBI. It accept deposits, issues debit cards and credit cards and allows all money transfers and payments. One97 communication, parent company of Paytm got approval from RBI to convert digital payment business to payment bank.
Features of Paytm Payments Bank
- Existing Paytm customers would be transferred to Paytm Payment Bank unless they opt out before 23-May-2017.
- It offers zero charges for all its online transactions.
- It offers Savings Bank account with zero balance in the account.
- It offers 4% interest per annum on its deposits in Savings Bank account.
- Paytm Payment Bank is expecting to open 31 branches and 3,000 customers point in next 1 year to run its operations.
- It offers current account to all its merchants who opened account in Paytm earlier.
- It offers Savings Bank Account to its paytm customers only upon invitation.
- It offers cash back of Rs 250 for deposit made for Rs 25,000 in the Savings Bank Account.
- Paytm Payments bank will also allow deposits of up to Rs 1 lakh along with offering savings and current accounts with a debit card.
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What are Paytm Payment Bank Charges?
While on face of it, Paytm Payment Bank indicated zero transaction charges for online payments, there are several areas where its services are limited and beyond that it would charge it.
- IMPS, UPI, RuPay transactions and NEFT payments would be free of charge and unlimited, the bank will charge Rs 100 plus delivery charges for annual subscription for physical Rupay Debit cards, lost card replacement and cheque books.
- The bank will allow five free monthly cash withdrawals from its ATMs in non-metro locations and charges of Rs 20 per transaction thereafter.
- In metro cities only three free monthly transactions will be allowed.
What happens to existing Paytm customers?
Paytm currently has 100 Mn customers. Since existing paytm business is being converted into payment bank, all existing paytm customers would be automatically converted to customers of Paytm Payment Bank. Customers were given an option to opt out by 23-May-2017 in case they are not interested to move their account. However this is only for digital payments. They need to send invitation and do KYC before they open S.B. Account.
How to open Savings Bank Account with Paytm Payment Bank?
Currently Paytm Payments Bank has launched Banking App for its employees only. It would soon launch Banking App for other customers too.
- Customers need to visit Paytm Payment Bank page and send invitation to open S.B.account.
- They need to do KYC (Know Your Customer).
- Once they complete KYC, they would be able to open Savings Bank Account.
- Customers can make deposits into such S.B. Account to enjoy cash back and interest on such deposits.
- Paytm Payments Bank interest rate on SB account is 4%.
Comparison of Paytm Payment Bank Account Vs Airtel Payment Bank Vs India Post Payment Bank
While most of the payment bank would offer similar services, let us check on Interest aspect.
Paytm Payment bank would offer 4% per annum on SB Account. Airtel Payment bank is offering 7.5% interest per annum. India Post indicated it would offer 5.5% interest. Hence Airtel Payment Bank would score high in this aspect.
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What does the management say about the launch of Paytm Payment Bank?
Paytm Payment Bank has raised $ 1.4 Bn funding from Softbank recently. Company is growing aggressively and expecting few more rounds of funding to the tune of $ 1.5 Bn in next 3-5 years for the expansion of the business.
Paytm Chairman, Mr. Vijay Sharma, said, “RBI has given us an opportunity to create a new kind of banking model in the world. We are proud that our customer deposits will be safely invested in government bonds, and be used for nation building. None of our deposits will be converted in to risky assets”.
Speaking to media, Renu Satti, CEO of Paytm Payments Bank added, “We are very excited to launch Paytm Payments Bank and bring financial services to unbanked segment of Indians. Our ambition is to become India’s most trusted and consumer-friendly bank. Leveraging power of technology, we aim to become the preferred bank for 500 million Indians by 2020”.
Conclusion: Many of us would have benefitted with Paytm by doing online transactions with a click of button. Let us wait and see how Payment Payment Bank would create its uniqueness the way it did like Paytm.
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Paytm Payments Bank – Should you opt for it
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