Zerodha Coin FDs — How to Invest in Bank Fixed Deposits on Coin (Step-by-Step Guide)

 

Zerodha introduces Fixed Deposit investments via its Coin app, giving investors a seamless way to earn secure returns directly through their Zerodha account.

Zerodha Now Lets You Invest In Bank FDs Via Coin: Step-By-Step Guide

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Intro (Quick summary)
Zerodha — India’s largest discount broker — has rolled out a fully digital Fixed Deposit (FD) facility inside its long-term investing app, Coin. The move brings bank-style FDs onto a platform many retail investors already use for direct mutual funds, SIPs and NPS, letting you open competitive bank FDs without leaving the Coin ecosystem. This article explains what the Coin FDs are, how they work, the exact step-by-step process to invest, safety & taxation points, plus practical tips to pick the right tenor and bank.

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What exactly did Zerodha launch?

Zerodha is adding digital Fixed Deposits (FDs) to Coin, allowing users to open FDs from select banks via a fully online flow in the Coin app/website. The offering is the result of a partnership with fintech players (reported partner: Blostem) and ties into Rainmatter (Zerodha founders’ investment vehicle) backing/partnership dynamics highlighted in press reports. The initial launches focus on FDs from small finance banks that typically offer higher interest rates than large commercial banks.

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Why this matters (benefits at a glance)

1. One-stop long-term investing: Coin was already home to direct mutual funds, SIPs and NPS — adding FDs keeps all your ‘set-and-forget’ instruments in one app.
2. Fully digital onboarding: You can open an FD without visiting a branch or maintaining a savings account with the issuing bank. The entire process — KYC, nomination, payment — is digital.
3. Competitive small-bank rates: Initial partners include small finance banks that often give higher yields (Coin lists rates up to ~9.10% on its FD page).
4. Low ticket sizes & flexibility: Coin’s FD product supports small minimums (support pages mention low thresholds), widening access for retail savers.

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Before you start — important things to know

• Banks & availability: Early FD partners listed on Coin include select small finance banks (for example, Suryoday Small Finance Bank and Unity Small Finance Bank are among the options listed in Zerodha support). Availability can change over time and new banks may be added.
• Interest rates vary by bank and tenor: Small finance banks typically offer higher coupon rates; always check the exact rate for your chosen tenor before booking. Coin’s FD page shows competitive rates and a rate table for tenors.
• Deposit Insurance: Bank FDs are covered under Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor per bank — this is standard for bank FDs (verify coverage per bank).
• Taxation: Interest from bank FDs is taxable as per your income tax slab. TDS rules may apply on interest above specified thresholds — always consult a tax advisor or your CA for personalized treatment. (General rule: bank FD interest is taxable as income from other sources.)

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Step-by-Step: How to invest in a Bank FD on Zerodha Coin

Below is a practical, numbered walkthrough you can follow in the Coin app or Coin web portal. These steps are distilled from Zerodha’s FD support pages and the Coin product flow.

Step 1 — Login to Coin

Open the Coin app (or coin.zerodha.com) and log in with your Zerodha (Kite) credentials. Coin uses your existing Zerodha account — if you don’t have a Zerodha account, you’ll need to create one first.

Step 2 — Navigate to the FDs section

From the Coin dashboard, look for a section titled “Fixed Deposits / FDs” or a product menu that lists Fixed Deposits. Click Explore FDs (or similar CTA). The FD page shows banks, available tenors, and headline interest rates.

Step 3 — Compare available banks & tenors

You’ll see a list of partner banks and their offered rates for various tenors. Compare:

• Interest rate for the tenor you want (short-term vs long-term).
• Minimum investment amount.
• Whether premature withdrawal is allowed and any penalty.
• Deposit insurance coverage and bank creditworthiness.
  Tip: don’t pick a slightly higher rate blindly — check bank reputation and liquidity rules.

Step 4 — Select bank, tenor & amount

Choose the bank and tenor (e.g., 1 year, 2 years, 3 years) and enter the investment amount. Coin’s UI usually shows the maturity amount and effective annual yield in real time.

Step 5 — Complete KYC / e-KYC if needed

If the FD bank requires additional KYC or verification, complete the e-KYC flow inside Coin. Since you already have a Zerodha account, many details (PAN, Aadhaar mapping, contact details) are prefilled; Coin will guide you if anything extra is required.

Step 6 — Nomination & declarations

Select nominee(s) and accept declarations (bank FDs require nominee details). Confirm the payout instructions (credit to your bank or reinvestment).

Step 7 — Pay for the FD

Coin will let you pay by UPI or net banking (or a designated gateway). The flow is fully digital — you won’t need to open a separate savings account with the issuing bank in many cases. After payment, you’ll receive a booking confirmation and a certificate / e-receipt showing FD account details and maturity date.

Step 8 — Track & manage

You can track your active FDs in Coin under the FD holdings section. For premature closure, nominee updates or interest certificates (Form 16A/TDS certificates), use Coin’s support or bank’s customer service as directed in the app.

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Real examples: banks, min ticket, and headline rates (what to expect)

Zerodha’s Coin lists partner banks and shows their live rates on the FD page. At launch Coin’s marketing/support pages show competitive rates (examples up to ~9.10% p.a.), and the platform initially partners with select Small Finance Banks. Always check the live Coin FD page for the latest rate table before booking.

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Safety & trust: Are Coin FDs safe?

• Bank FD mechanics: When you book a bank FD via Coin, the deposit is with the underlying bank (not Zerodha). That means the FD’s credit exposure is to the issuing bank. Most banks listed are regulated entities (including small finance banks), and deposits up to ₹5 lakh are covered by DICGC insurance per bank.
• Platform security: Zerodha has a long track record in broking and wealth products; Coin uses standard digital KYC and secure payments. However, the underlying risk (credit risk & liquidity) depends on the bank itself.
• Due diligence: Prefer banks with clear regulatory standing and reasonable asset quality metrics. If you’re parking large sums, diversify across banks so DICGC insurance limits apply separately for each bank.

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Taxation & accounting — practical points

• Tax treatment: Interest from bank FDs is taxed as “Income from Other Sources” at your slab rate. There is no special concessional rate for FD interest.
• TDS: Banks may deduct TDS on interest above specified thresholds if you don’t provide Form 15G/15H when eligible; check bank rules. TDS is not the same as final tax — include the interest in your return and claim credit for TDS.
• Form 16A / 26AS: If TDS is deducted, it will reflect in Form 16A and in your Form 26AS (tax credit statement). Use Coin or the issuing bank’s support to obtain interest certificates if required.
  (This section provides general information — consult a tax professional for personal advice.)

💡 Key Tax Rules — At a Glance (India)

Understanding how your Fixed Deposit (FD) interest is taxed helps you plan smarter. Here’s a quick snapshot of what every Zerodha Coin investor should know.

• Tax treatment: FD interest is taxed under “Income from Other Sources” as per your income slab rate.
• TDS (Section 194A): Banks deduct TDS when total FD interest exceeds the specified limit for the financial year. Senior citizens enjoy higher thresholds.
• Form 15G / 15H: Submit to avoid TDS if your total income is below taxable limit (Form 15H for senior citizens).
• Proof & Reporting: Collect your interest certificate or Form 16A from the bank or Zerodha Coin for ITR filing.
• DICGC Reminder: FD deposits are insured up to ₹5 lakh per bank under DICGC protection.

Item	Practical Note
Tax on FD Interest	Taxed as “Income from Other Sources” at your slab rate.
TDS Applicability	Deducted if total interest exceeds the FY limit (per Section 194A).
Form 15G / 15H	Submit to avoid TDS if you meet eligibility criteria (15H for seniors).
Where to Get Proof	Bank interest certificate / Form 16A / Zerodha Coin statement.
Insurance Limit	Deposits insured up to ₹5 lakh per bank by DICGC.

⚠️ Disclaimer: Tax and TDS rules may change. Verify current limits with your bank or the Income Tax Department before filing. Consult a qualified CA for personalized advice.

Sources: Income Tax Department (Section 194A guidance), Zerodha support articles, and leading tax portals.

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FD vs other safe alternatives on Coin (quick comparison)

• FDs (bank FDs on Coin): Capital protection (subject to bank credit risk), fixed interest, limited liquidity (penalty on premature withdrawal possible), predictable maturity amount.
• Debt funds / liquid funds (Mutual funds on Coin): Market-linked returns, higher liquidity, and some risk of NAV volatility; not capital guaranteed.
• Short-term government securities / PSU bonds: Lower credit risk (for GoI instruments), traded markets — but may require broking or specialized platforms.
  Choice depends on risk appetite, horizon, and tax bracket.

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How to choose the best Coin FD — checklist

1. Compare effective yield: Look at the absolute interest and the effective annual return for the exact tenor.
2. Check minimum & maximum ticket sizes: Some banks allow tiny minimums; others have higher limits.
3. Confirm premature withdrawal terms: If you might need liquidity, check penalty structure.
4. Verify DICGC coverage: Deposits up to ₹5 lakh per bank are insured — split larger amounts across banks if needed.
5. Assess bank quality: Prefer banks with stable credit profiles for multi-year FDs.
6. Tax efficiency: For taxable investors in higher slabs, compare post-tax yield with alternatives such as tax-saving FDs or eligible tax instruments.

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Common questions (FAQ)

Q: Do I need a savings account with the issuing bank to open an FD via Coin?
A: No — Coin’s FD flow is built to let you open FDs digitally without holding a savings account with the bank in many cases. Payment and credit instructions are managed through the platform.

Q: Will the FD show up in my Zerodha holdings?
A: Yes — Coin lists the FD under your holdings, giving you maturity date, interest rate and other details.

Q: What is the minimum investment?
A: Minimums vary by bank — Coin support mentions low minimums (some as low as ₹1,000) for certain partner banks. Check the bank’s FD details before booking.

Q: Can I break the FD prematurely?
A: Most bank FDs allow premature withdrawal subject to penalties — exact rules differ by bank and tenor. Confirm on the FD page before investing.

Q: Is Coin acting as a custodian or broker for these FDs?
A: Coin is the platform/partner that facilitates the booking and onboarding; the FD itself is held with the issuing bank. Read the FD agreement and Coin’s disclosures for full details.

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Pros & Cons — objective view

Pros

• Convenience: Book bank FDs without branch visits.
• Competitive rates: Small finance bank rates can beat big banks.
• Integrated view: See FDs alongside your mutual funds and NPS in Coin.

Cons / Considerations

• Bank credit & liquidity risk: Higher yields often come with smaller banks — check fundamentals.
• DICGC limit: Insurance covers ₹5 lakh per bank only.
• Tax: Interest is taxable at slab rates — not always tax-efficient for high-rate taxpayers.

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Practical tips & smart moves

1. Stagger maturities: Use laddering (different tenors) to balance liquidity and yield.
2. Spread risk across banks: For amounts above the insured ₹5 lakh limit, split deposits across different banks.
3. Check renewal/TDS rules: If you plan automatic renewal, note the date and updated rate environment; auto-renewal will lock you into the bank’s then-current rules.
4. Compare post-tax yield: For taxable investors, calculate post-tax returns (post TDS and slab tax) rather than headline rates.
5. Keep records: Save e-receipts and interest certificates for income tax filing.

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The bigger picture — why wealth platforms are adding FDs

Wealth platforms (including Coin, Smallcase, super.money and others) are adding FDs to expand beyond equities and mutual funds into conservative, fixed-income retail products. This trend helps investors build diversified long-term portfolios on one app and lets platforms cross-sell low-risk products with simple digital journeys. Zerodha’s approach maintains Coin as a passive, long-term investing space separate from Kite’s active trading tools.

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Final verdict — who should use Coin FDs?

• Ideal for: Conservative investors who want predictable returns and convenience; Zerodha users who prefer keeping all long-term investments in one place; investors seeking better rates from small finance banks.
• Be cautious if: You’re parking very large sums above DICGC limits with a single bank, or you need intraday liquidity — alternatives like liquid funds might suit you better.

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Closing — next steps (actionable)

1. Log in to Coin and open the FD section.
2. Compare banks, rates and tenors for your target amount.
3. Use the step-by-step process in this guide to book your FD.
4. Keep copies of the e-receipt and interest certificates for tax filing.
5. If unsure about bank credit risk or tax, consult your financial advisor or CA.

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Sources & further reading

• Zerodha Support — FDs on Coin (how to invest, FAQs).
• Coin by Zerodha — Fixed Deposit product page (current rates, tenor table).
• Moneycontrol — Zerodha to roll out Fixed Deposits on Coin app (report on launch & partnership).
• LiveMint — Coin by Zerodha to offer fixed deposits soon (industry coverage).
• NewsBytes — Zerodha will let you invest in FDs (onboarding & process details).

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