It has become much easier to open a zero balance savings account in India over the years thanks to digital onboarding supported by regulatory authorities. Today, you can open a savings account either offline at a bank branch or online through your smartphone. In this blog, we will cover both methods at a high level, briefly explore their pros and cons, and more.
Before you dive in, check out this article on using the DigiLocker system to open a savings account, store your documents, and more.
Here's a quick overview of the current offline process:
To open an account:
To open a new account with a financial institution, follow these steps:
Step 1 - Visit the official website of the institution or download their mobile app.
Step 2 - Select the type of account you want to open.
Step 3 - Upload all required KYC documents in the sections provided.
Step 4 - Authenticate your identity by taking a selfie or doing a live call with a bank agent, as mandated by the bank or account type.
Step 5 - Activate your account and debit card.
If you don't have official documents, you can still open a small account by providing self-attested photos and a signature in the presence of a bank official. Keep in mind that these accounts have restrictions and are only valid for 12 months, but they can be extended for another 12 months if you apply for official documents within the first year of opening the account.
Small accounts have certain limitations:
To upgrade to a regular account with no restrictions, you need to go through a Know Your Customer (KYC) process. On Fi Money, this process is done via a video KYC. You can read more about video KYC on Fi Money here.
The Budget of 2023–24 aims to make the Know Your Customer (KYC) process more flexible, with a ‘risk-based’ policy for financial institutions and an expanded scope of documents available in DigiLocker for individuals. The government is also working to synchronise citizen data across multiple portals. The Income Tax department has advised that permanent account numbers (PAN) not linked with Aadhaar by March 2023 will be rendered “inoperative.”
With the KYC process becoming simpler, not everyone opening a bank account will need to go through the same rigorous KYC process. Instead, the process will be risk-based, meaning that only customers identified as high-risk will be scrutinised extensively. This should make the overall account opening process quicker and simpler.
The Regulatory Authority has made the process of updating KYC with banks a lot easier, especially during the course of the pandemic when visiting a branch was next to impossible.
While it is possible to open accounts without KYC documents, these are very rare exceptions that we come across and are more or less converted to full savings accounts in due course. In fact, the process of opening a new bank account without KYC is more cumbersome. With the facilities and systems in place, it's better to get your KYC documents done before you open a new bank account online.
You can open a zero-balance savings account with Federal Bank through Fi Money for free. The account comes with a VISA Platinum debit card that has no hidden fees and zero forex charges. You can use it to deposit your savings, earn interest, send and receive payments instantly, and analyze expenses. Upgrading to other account plans gives you access to premium features such as Jump, US Stocks, and Mutual Funds, as well as up to 4x rewards.
Yes, you can open a bank account without KYC if you meet certain criteria:
When you're opening a bank account, you'll need to provide an ID proof like Aadhaar, PAN card, or Voter ID, and an address proof like a telephone or gas bill. Keep in mind that the requirements for documentation may vary slightly depending on the bank.
Most banks require a valid Aadhaar Card as well as a PAN Card to be produced when opening a bank account.
If the address provided by the customer on the proof of address differs from their current address, a straightforward statement from them regarding their present address would be satisfactory. Once the Know Your Customer (KYC) process is completed at one branch of the bank, it remains valid for transferring the account to any other branch of the same bank.
When you're opening a bank account, you'll need to provide an ID proof like Aadhaar, PAN card, or Voter ID, and an address proof like a telephone or gas bill. Keep in mind that the requirements for documentation may vary slightly depending on the bank but at least one type of ID card may be a part of mandated documents to be submitted.
