Mumbai: IDFC Bank has partnered online-broking firm Zerodha to offer three-in-one accounts to its customers. The newly-licensed private bank has decided to abandon its own securities firm and take the partnership route to leverage the fintech’s discount brokerage platform.

The tie-up also enables Zerodha to compete head-on with HDFC Securities and ICICI Securities , which allow customers to seamlessly transfer funds whenever they trade rather than parking funds with the broker.

IDFC Bank head (personal banking) Amit Kumar said, “It was possible for us to offer a three-in-one account on our own since the group has a securities licence and a depository service. But that would have been a ‘me too’ offering. Given the technology and learning that Zerodha is able to provide, we saw an advantage in tying up with them.”

IDFC Bank, which is in the midst of a merger with Capital First , has expanded its distribution to 60 cities and will have 200 branches in metros, tier-1 & tier-2 cities by September. The bank has 30 lakh customers and is adding a lakh every month.

Zerodha is a startup that has acquired over 8% share of all retail trades in the country. The firm already has 10 lakh registered users. Zerodha founder Nithin Kamath said, “Around 80% of our customers are below 37 years of age, 55% of them are new-to-market, digitally savvy and expect a greater degree of convenience. This is similar to the demographic profile of IDFC Bank customers.”

In a Zerodha trading and demat account linked with any other bank, the customer would need to fund the Zerodha account through a payment gateway or NEFT/ RTGS . Besides increasing the number of steps, the customer incurs a small payment gateway cost. The customer will also have to figure out how much to park with the broker.

The latest three-in-one account makes the whole process seamless. The balance in the IDFC Bank savings account is visible on the Zerodha log-in page and can be added with a click. Going ahead, Zerodha plans to use technology to deliver expensive research products at the equivalent of $2. IDFC Bank is also working on developing the ASBA ( application supported by blocked amount) ) facility, which enables customers to subscribe to IPOs without blocking funds.

