Digital SB accounts click with youngsters

Digital Savings Bank accounts that can be opened online instantly have become a hit with youngsters.

Unlike a normal account that requires one to go to a bank to submit documents in line with Know Your Customer (KYC) norms and wait in queues, digital accounts can be opened anytime using a smartphone or computer.

Yono, State Bank of India’s flagship venture, has witnessed the opening of 27,000 accounts per day in July on some days. This is seen as a ‘digital bank’ with a five-time increase in the daily run rate for account opening in the last two months, according to data provided by SBI.

Kotak Mahindra Bank’s digital SB account, titled 811, has also elicited huge response, according to its Executive Vice-President, Puneet Kapoor. The bank added 65 lakh customers in 15 months since the launch of its online account opening facility in March 2017. “This represented an annualised growth of 61 per cent,” he said.

Aadhaar comes handy

An online savings account can be opened by downloading the bank’s app and authenticating oneself with Aadhaar credentials via a one-time password. It is a zero-balance savings account with zero charges for all digital transactions, where customers can earn 5 per cent on savings account balance up to ₹1 lakh and 6 per cent on balances above ₹1 lakh up to ₹1 crore.

Not all who open these accounts are first-time account-holders, though. “I have another main account in a private bank. But I did open an account in Kotak Mahindra Bank as it comes with no minimum balance charges and reasonably good interest on funds in SB accounts,” said N Kalyan, a software professional.

As per available data, most of these accounts are opened by those in the age group of 20-40 years.

At a time when minimum balance charges have become a constraint for many, these accounts come as a welcome relief.

For banks that offer this product, it’s a win-win situation as it drives digitisation and promotes current accounts and savings accounts (CASA), shedding bulk deposits.

Axis Bank’s online instant savings account ASAP has also witnessed encouraging response from customers. Over 6.4 lakh instant accounts have been opened during the last few months, including 3.9 lakh accounts in the first quarter.