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How Can a Zero-Balance Savings Account Change Your Life?

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June 20, 2022


What’s Inside

Banking has undergone significant changes since the 80s and 90s. Nowadays, it only takes a few minutes to open a zero-balance savings account, whereas maintaining a minimum balance was often required in the past. Failure to meet this requirement usually meant penalties or account closure. However, modern banks and financial institutions now offer the convenience of zero-balance savings accounts, which has greatly improved accessibility for individuals.

How Does it Differ From Regular Savings Account

Savings accounts generally require you to maintain a minimum amount of money. Failing to maintain a minimum balance in your account — calculated by taking the average account balance over a month or every quarter — could potentially lead to penalties.

On the other hand, a zero-balance savings account has no minimum balance requirements. You will not be penalised even if you have no money in this account. However, depending on which bank you sign up for, the charges related to savings accounts, like maintenance fees, may still apply to some such accounts. So it’s advisable to always have some balance in your account at any time.

Benefits of Zero-Balance Account

No Minimum Balance Requirement

A zero-balance account can have no funds and still be free from penalties. These savings accounts are great for new-to-banking users and individuals who cannot afford a traditional savings account.

Access to Digital Banking Features

You can carry out transactions, check your bank balance, or put money towards investments at the tap of a button on your smartphone.

Free Monthly ATM Withdrawals

You can use debit cards/ ATM cards to withdraw money from their zero-balance accounts through ATMs. For most banks, the first 3 - 5 withdrawals in a given month are free of cost, after which a small fee gets levied on each withdrawal.

Special Offers For Salary Account

Most salary accounts are, by default, zero-balance savings accounts. It may include added perks like reward points, insurance options, etc. If you stop receiving a salary, the account will automatically convert into a regular savings account & other fees may still be applicable.

Drawbacks of Zero-Balance Account

Less Features

In most major banks, the savings accounts that require a higher minimum balance offer more features than zero-balance savings accounts — like higher withdrawal limits.

Lower Interest Rates

It doesn't apply to all banks. However, some private sector banks offer lower interest rates for their zero-balance accounts than those requiring a minimum balance.

Deposit Limit‍

‍As per regulations, most zero-balance savings accounts in India have deposit limits. It means you can only deposit cash up to a specific limit (usually ₹1 lakh), after which you must change your bank account type to a regular savings account with a minimum balance requirement.

Types of Zero-Balance Accounts

Regular Zero-balance Account

The most common type is offered by most banks and financial institutions. These accounts do not require you to maintain a minimum balance.

Online-Only Zero-Balance Account

By operating online, money management platforms save a lot of overhead costs (building rent, ground-staff salaries, etc.). They partner with licensed & regulated banks (where all the money is secretly stored) but have no offline presence. Due to this, zero-balance accounts offered by these platforms (like Fi Money which partners with Federal Bank) provide better interest rates and lower fees than typical bank accounts.

Pradhan Mantri Jan Dhan Yojana Zero-balance Account

Launched by the Indian government, it intends to make banking more accessible to people in the rural parts of the country. This scheme is for individuals who can't afford the fees and penalties levied on a traditional savings account.

  • No minimum balance
  • Indian citizens above the age of 10 can apply for this account
  • Account holders get a free insurance cover of up to ₹1 lakh
  • Users get an ATM card free of cost (RuPay debit card)

Joint Zero-balance Account

Identical to a regular zero-balance account in the way it functions. But, in the case of a joint zero-balance account, two or more parties may have access to it. Any individual linked to the account can deposit or withdraw money from it.

How to Open a Zero-balance Savings Account?

Opening a zero-balance savings account in India is relatively easy. There are two primary ways you can open a zero-balance savings account.

Traditional Method

  • Apply for one through your local bank
  • You must fill out forms with your personal information & ID proofs (Aadhaar, PAN, etc.)
  • You will need 2 - 4 passport photographs of yourself

Once you’ve submitted your documentation & verified by the bank, your account should be opened within 24 - 48 hours.

Digital Method

  • Sign up via mobile app/website & enter your personal information
  • Upload scanned photographs of yourself, or take a picture of yourself through the app
  • Upload scanned copies of your Aadhaar and PAN cards for identity/address proof
  • Enter the verification code sent to you via SMS/email

Once these steps are done, your account should be ready. It may take less than 24 hours to activate.


Banking has evolved significantly, replacing minimum balance requirements with the convenience of zero-balance savings accounts. These accounts offer accessibility and digital features, making banking easier for individuals. While there may be fees and limitations, opening a zero-balance account is now a streamlined process. It reflects the industry's commitment to meeting diverse customer needs in the digital age.

Want a Zero-Balance Account? Get One in 3 Minutes!

Fi Money offers a zero-balance online Savings Account in partnership with Federal Bank. You can easily sign up for free & open a Savings Account online in 3 minutes. You can also use this Savings Account to safely stash your savings in deposits, earn additional interest, send/receive money 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. & up to 4x rewards for all payments!

Frequently Asked Questions

1. What are the features of a zero-balance savings account?

*No minimum balance

*Net banking access

*Low barrier for entry (Example: Homemakers, students, etc.)

2. Can we deposit more than ₹1 lakh in a zero-balance account?

The deposit limit in most zero-balance accounts is ₹1 lakh. Technically, you can deposit more than ₹1 lakh in a zero-balance account — however, doing so may turn your zero-balance account into a regular account. Remember to contact your bank if/when you do this, as most regular savings accounts have minimum balance requirements

3. What are the disadvantages of a zero-balance account?

For most banks, the higher the minimum balance required for an account, the more privileges you get with said account. So, zero-balance savings accounts:

*Offer lower interest rates than their counterparts

*Have a deposit limit of ₹1,00,000

4. Can I open a zero-balance account without a PAN card?

Users can open a bank account without having all their documents/ papers (a basic ration card or voter's ID will also suffice) under the Pradhan Mantri Jan Dhan Yojana zero-balance accounts.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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