At a fundamental level, Zerodha is operating as a distributor for FD products offered by partner banks such as Suryoday Small Finance Bank, Utkarsh Small Finance Bank, and Unity Small Finance Bank.

In such arrangements, platforms typically earn backend commissions from banks for sourcing deposits, while end users are not charged any fees. This keeps the offering competitive and aligned with Zerodha's long-standing zero-cost positioning for retail investors.

However, analysts note that FD distribution offers thin commissions and is unlikely to be a significant primary revenue driver. Instead, it appears to be a strategic move to capture a larger share of user savings, especially from conservative investors.

"By integrating FDs into Coin, Zerodha addresses a key friction point: fragmentation. Users often hold deposits across multiple banks, making tracking difficult. A unified interface improves convenience and keeps users within the platform," said the analyst cited above.

More importantly, the move could improve retention and engagement. With equities, mutual funds, and FDs in one place, Zerodha strengthens its position as a one-stop platform, increasing the scope to cross-sell higher-margin products like trading and derivatives.

Overall, while FD distribution may contribute incremental commission income, the larger play for Zerodha lies in deepening user relationships, increasing wallet share, and reinforcing long-term platform stickiness rather than driving immediate topline growth.

Zerodha had launched Coin in April 2017 as a direct mutual fund platform, which has since evolved into a broader investment offering. Moreover, during FY25, Zerodha consolidated revenue saw a dip of 11.5% year-on-year revenue to Rs 8,847 crore, while the profits for the firm stood at Rs 4237 crore during the same period.