Switch to IDFC Saving account?

Optimize earnings on your resting money

I have recently opened a saving account in IDFC. I will be switching to it as my primary bank. Earlier I had an account with Kotak Mahindra Bank.
Disclaimer: This blog is not sponsored by IDFC. If IDFC is looking at it, hope you might now consider sponsoring me🙈.

Why?

Interest Rates

IDFC initially said they would be giving a 7% interest rate on savings accounts in January 2021. Later next month, they reduce it to 6%. But still, it is better than other banks which are giving 3.5%-4% right now. I had my existing account with Kotak which used to give me 6% initially. Right now, Kotak gives only 3.5% up to 1Lac and 4% on the amount which is above 1Lac.

Edit(9 May 2021)

From May 2021, even IDFC has decided to reduce the interest rate further. They are giving 4% till 1 lac and 4.5% above 1 lac. View IDFC's latest interest rates here. Looks like they were successfully able to attract new customers with 7% interest rates. With enough liquidity, it was futile for them to continue the 7% campaign any further. I would not crib about the reduced rates from 7% to 4%. Because a .5% interest rate more than the other banks is still commendable.

Account opening

Seamless digital process. You would need to deposit the initial amount from an existing account that is in your name. After the initial deposit, you need to complete your e-KYC. You will get a KYC video call from their executive. You need to keep your original PAN, Aadhaar, and a blank sheet of paper on which you need to sign. It is a typical 2-minute process. Do make sure you are in a well-lit room at the time of video KYC. If you don’t complete your KYC in 6 months, they would close your account. Also on a non-KYC account, you can’t deposit more than 1Lac, this would defeat the 1 st point for which you are opening the account.

Benefits and Vouchers

They are giving various benefits and vouchers on reaching milestones that are not so hard to reach 💁. Just to get a ₹500 voucher, I registered my existing Kotak account itself as a beneficiary to the IDFC account portal and transferred the amount from the IDFC account 😎. So you get the idea…. it is actually just free money. And sending “Hi” for registering to their Whatsapp Banking is also no big deal.

Average Monthly Balance

There is two variant of account with different AMB to maintain:

  1. 25k —with Visa Signature Debit card
  2. 10k — with Visa Classic Debit card

My Kotak bank mandated to keep an average monthly balance of 50k. IDFC on the other hand only has an average monthly balance of 25k. You can argue that Kotak has an AMB of 10k only. But that account is of very low tier. Kotak also has a 0 balance account called 811. But, they charge for the physical debit card while IDFC only asks for 25k and 10k as AMB. But out of these, which one to choose? There is a big trade-off if you go with the 10k variant. So better stick with the 25k AMB variant(quick comparison available on the IDFC website). Still, I am explaining the major two benefits that come only with the 25k AMB variant next.

Airport Lounge Access(only with 25k AMB variant)

Pune airport — Earth Lounge

Visa Signature debit card comes with airport lounge access — 2 visits every quarter for domestic airports. Have you ever traveled by flight? If yes, did you access the airport lounge? If no, then you are missing the treasure. The gist of airport lounge access — all you can eat at ₹2 !!!.

Unlimited free Bank ATM cash Withdrawals(only with 25k AMB variant)

With 25k AMB variant. There is no charge for the above 5 withdrawals from an IDFC/non-bank ATM. The 10k AMB variant only has 5 Free ATM transactions per month at IDFC and non-Bank ATM.

So you see, it is better to shell out 15k more to enjoy the airport lounge access and unlimited free cash withdrawals from any ATM. Anyway, the extra 15k you keep with IDFC is earning 6% interest.

Zerodha IDFC FIRST Bank 3-in-1 Account(Advance stuff)

This one is for those who like to invest their money and do not want to pay high brokerage. Zerodha is a leading broker for investing in stock markets. To know what does this account type means go to the Zerodha page. I already had an account with Zerodha. I just needed to link my newly opened IDFC account with it. How to do it, you ask? Again refer Zerodha page. Oh, Girl! they have such good documentation as support. For proceeding with this, I needed to sign the POA (Power of Attorney to Zerodha for handling my IDFC bank account) and courier it to the Bengaluru office. This gives Zerodha access to withdraw funds from my IDFC saving account. Does that sound scary to you that Zerodha has Power of Attorney and can access my savings account? Well, then maybe investing in the stock market is not for faint-hearted people. Also, I trust Zerodha that it won’t withdraw money unless I go to the Zerodha platform to add funds. Benefit — I can now add funds to my Zerodha trading account from my IDFC account without going through a payment gateway(less of a hassle).

Bonus Tip: Well, I was not so keen on shelling out any bucks for sending the POA document through courier 🙈. So I submitted it to the nearest Zerodha office and they took care of sending it to their Bengaluru office.

Any hiccups you ask?

DBT Transfer

If you have bought an LPG and got the subsidy amount in your bank, that was possible due to your bank mapped to NPCI. Multiple bank accounts can be linked with Aadhaar. But, the subsidy/DBT(Direct Benefit Transfer) is mapped to only one of your accounts. I haven’t got it changed it to IDFC.

Steps to change the DBT mapping:
At the time of online account opening, click the DBT transfer checkbox if you want your new IDFC bank mapped to DBT.

So why did my IDFC account isn’t mapped yet? That is because at the time of opening the account I wasn’t so sure that I would close my Kotak bank account. But now I feel it doesn’t make sense to keep the Kotak account open and park 50k money there just to avoid AMB maintenance charges.

So now, I want to close the Kotak bank account, but the subsidy is mapped to the Kotak account. Hence, any new subsidy would be sent to the Kotak and not IDFC. For this, I need to first make sure that IDFC is mapped for DBT. Only then, I will close the Kotak bank account. I have already raised the request with the IDFC, but it has taken more than a month now😢. Now, this could be the fault with the NPCI rather than the IDFC (बिक गयी है गौरमिंट) — I am not sure. I have already tweeted about the issue(Please retweet, like, and share so that NPCI knows people are affected). I am also following up with IDFC on this. As soon as I get the confirmation that my new IDFC account is mapped for DBT, I will close my existing Kotak account.

Next Steps

Open the savings account. Click here.