If you’re tired of maintaining a minimum balance in your bank account, you may have considered getting a zero-balance account at some point. But if you haven’t, what is a zero balance account, anyway? And is it possible for anybody to open this kind of bank account?
To help you understand this bank facility better, it is essential to begin with the basics. So, let’s check out this kind of bank account and its features.
Generally, when you open a savings account with any bank, you must comply with the bank’s terms for maintaining a specified minimum sum of money in your account at all times.
You will be liable to pay a penalty if you do not maintain this sum as a minimum balance in your savings account. A zero-balance bank account eliminates this issue. A zero-balance account is a savings bank account with no minimum balance requirements.
Before you decide whether or not to open a new 0 balance account, you need to understand the key features that this banking product offers.
The most distinct feature of a zero balance account is that it comes with no minimum balance requirements. You can maintain a nil balance in your account without worrying about any charges or penalties. Also, even if you have no funds in your account, you will not lose the rights to any facilities that come with the account.
Speaking of facilities, your zero balance account offers you many. For instance, you get a free passbook along with your account. You can also deposit cash and cheques free of cost at any branch of the bank with which you’ve opened your zero balance account. These free facilities make banking much easier for you.
You can easily carry out various transactions with your new zero balance account. For instance, you can pay for various utilities like electricity, internet, mobile recharges, and more using the balance in your zero balance account. You can also make digital payments via various payment modes, including UPI, by simply linking your bank account with the payment channel.
With your zero balance account, you also can transact via your bank’s internet banking portal. This makes it extremely easy to check your balance online, pay for purchases on online portals and carry out other transactions from your home without having to visit the bank branch every time.
Your new zero balance account also allows you to create an account on your bank’s mobile banking app. With this facility, you can carry out various transactions, make fund transfers, open or close FDs and add beneficiaries with your smartphone. This makes it possible for you to enjoy banking on the go.
Fundamentally, a zero balance account is a savings account. So, like all savings bank accounts, this one also offers interest on the account balance at the rate specified by the bank. Typically, the rate of interest on a savings account is much less than what’s offered on a bank fixed deposit. But it still helps that you earn some interest on the amount lying idle in your account.
Apart from the above features, you also get many other benefits with your new zero balance account, including a safe deposit locker facility, a debit card for easy transactions, and ATM withdrawals.
There are a couple of restrictions you should be aware of if you plan to open a new zero balance account. Check out what these are below.
Some banks may place a limit on the number of withdrawals you can make during a month. In case you exceed this limit, your zero balance account may be converted to a regular savings account.
There is a restriction on the number of zero-balance accounts a person can open. It's limited to one zero-balance account per bank.
In conclusion, a zero balance account is a savings bank account that does not require a minimum balance to be maintained. It offers the convenience of free facilities, easy transactions, internet banking, mobile banking, and earns interest on the account balance. However, there may be restrictions on the number of transactions and the number of zero balance accounts a person can open. Understanding the key features and restrictions of zero balance accounts can help individuals decide if it is the right banking product for their needs.
Fi Money offers a zero-balance savings account in partnership with the licensed bank Federal Bank — you can easily sign-up for free & open a savings account online. You can also use Fi’s online savings account to safely stash your savings in deposits, earn additional interest, send/receive payments instantly, analyse expenses, or budget smarter. If you upgrade to other account plans within Fi — you get access to premium features like Jump, zero forex, US Stocks, Mutual Funds, etc. & not to mention up to 4x rewards!
Yes, you get many beneficial features with a new zero balance account. Some of the advantages include zero minimum balance requirement, easy transaction facilities, mobile banking, and net banking usage. To enjoy these features, you can consider opting for this bank account.
Typically, regular savings bank accounts come with a minimum balance requirement. The minimum balance required is usually around Rs. 10,000. But in some banks, the minimum balance requirement can be quite steep, like Rs. 25,000 or more.
If you do not have this amount in your account, your bank will lay a penalty for non-maintenance of the minimum balance due. The whole point of a zero balance bank account is to prevent you from going through the hassle of maintaining a specific sum in your account at all times.
The rules for zero balance accounts can vary depending on the specific bank and its policies. However, in India, certain categories of accounts, such as Jan Dhan accounts or Basic Savings Bank Deposit Accounts (BSBDA), are mandated to have zero balance requirements, ensuring that individuals can access basic banking services without maintaining a minimum balance.
Yes, a zero balance account can be closed automatically by the bank if it remains inactive for a certain period of time, usually specified by the bank's policy.
