Zerodha will soon let you invest in fixed deposits
What's the story
Zerodha, one of India's leading discount brokers, is gearing up to launch a fixed deposit (FD) product on its Coin platform. The move comes as part of the company's expansion strategy into low-risk fixed-income products for long-term investors. The new feature will be launched in partnership with Blostem, a New Delhi-based fintech start-up that has raised close to $1 million so far.
Funding
Investment in Blostem by Rainmatter Capital
Along with the FD product launch, Zerodha's investment arm Rainmatter Capital is also expected to lead a new funding round in Blostem. The amount of the investment has not been disclosed yet. Blostem's other investors include AC Ventures, mobile payments firm Mobikwik, and Delhivery founder Kapil Bharti.
User convenience
Fully digital FD process
The new FD facility will let users open fixed deposits directly through the Coin app, without having to maintain a savings bank account with the same institution. Most deposits are likely to be with small finance Banks, which usually offer higher interest rates than traditional commercial banks. The entire process will be fully digital, in line with Zerodha's minimalist approach to finance.
Investment focus
Coin's focus on long-term wealth building
Coin operates separately from Zerodha's trading platform Kite, which serves active traders and short-term investors. Coin focuses on the long-term wealth-building products such as mutual funds, sovereign gold bonds, government securities, and the national pension scheme (NPS). The platform already manages assets worth ₹1.6 lakh crore primarily through commission-free direct mutual fund investments and systematic investment plans (SIPs).
Strategy
Zerodha's vision for Coin platform
Zerodha intends to make Coin the go-to platform for passive, low-risk investing. The company believes that separating long-term and short-term investment journeys helps the investors manage risk and behavior better. This philosophy is in line with Zerodha's long-standing focus on financial discipline and simplicity rather than aggressive cross-selling.