Zero Balance Account - Definition, What is Zero Balance Account, Advantages of Zero Balance Account, and Latest News - ClearTax (2024)

FAQs

What is a zero balance account? ›

A zero-balance account refers to a savings bank account, which has a zero balance in it and yet not charged. It is legally known as Basic Savings Bank Deposit (BSBD) account as per the Reserve Bank of India (RBI) guideline.

A zero balance account (ZBA) is kept with a balance of zero by transferring money to and from a master account. ZBAs are not consumer products, but are used by larger businesses. Multiple sub accounts with a zero balance may be used by an organization to track and monitor spending by project or department.

A Zero Balance Account is a checking account that is linked to a master account. The master account is where all the deposits are made, and the ZBA is where all the disbursem*nts are made. The purpose of the ZBA is to maintain a zero balance, so the account is always balanced at the end of each day.

Zero balance account example

A business's master account holds $2,000. At the beginning of the business day, its three zero balance accounts are at $0. As the day progresses, multiple payments and cheques come into each sub-account, leading to each account holding $40, $60, and $100, respectively.

A zero-balance account is a savings account in which a bank allows the account holder to maintain a zero balance as per choice without any penalties or additional charges. The primary purpose of this account is to provide banking options for people who may need a regular income or have unpredictable cash flow.

Some of the disadvantages of a zero balance account include limited features, lower interest rates, higher transaction fees, limited customer support, and difficulty in receiving payments.

When it comes to selecting a Savings Account, a Zero Balance Account may not possibly be the best choice. This is primarily because even though it saves you the hassle of maintaining an average balance every month, it is crucial that you look at all facets of the account before you opt for it.

The short answer is that it depends on the bank's policies and procedures. Some banks may close a current account if it has been inactive for a certain period of time, such as six months or a year, regardless of the balance.

To know if your account is a zero balance account or if there is no minimum balance requirement, you can check the terms and conditions of your account, which are usually mentioned in the account opening documents, passbook, or statement.

Open a Zero Balance Digital Savings account instantly through Aadhaar OTP verification. Then complete the full KYC process of your account through in-person verification within 180 days from account opening by visiting your nearest bank branch or booking an appointment.

What is the credit limit for zero balance account? ›

You have to make sure that your balance does not exceed Rs 50,000 or that the total credit in the account remains within Rs 1,00,000 or below it in a year. If you exceed this limit, no further transactions will be permitted.

No problem! Now you can open a zero balance digital savings account and apply for the credit card during the account opening process online. Kotak 811 is a zero balance savings account that you can open online from the comfort of your home.

The zero-balance policy requires students to clear their outstanding fees in full to activate their status for new course registration.

Zero Balance or Basic Savings Account

This is similar to the regular Savings Account, but unlike that account, you are not required to maintain any minimum balance for this account. It does, however, come with an ATM/Debit Card for your daily transactions.

You have to make sure that your balance does not exceed Rs 50,000 or that the total credit in the account remains within Rs 1,00,000 or below it in a year. If you exceed this limit, no further transactions will be permitted.