All You Need To Know About Zero Balance Savings Account

by Arjit Chalmela Finance Student

A savings account is one of the most popular accounts that people can maintain. However, when it comes to maintaining this account, there is a certain minimum balance that needs to be maintained in the account. If the savings account holder does not hold the minimum balance, the bank charges a penalty which is deducted from the balance in the savings account. This penalty can lead to a significant depletion in the balance held in the savings account. To avoid this, for people who don’t maintain a high balance in their savings accounts, banks have an option of a zero balance savings account.

How does this account work?

Generally, a savings account has a certain minimum balance that has to be maintained every month. However, for a zero balance savings account, there is no such requirement. This means the bank will not charge any penalty in case the account balance goes to zero as well.

This account is highly beneficial to small savers who don’t generally maintain a high balance and have uncertain fund requirements. This account has all the features of a regular savings account:

Interest at prevailing interest rates
Internet banking and net banking facility
Debit cum ATM card
Free Cheque book facility
Free Passbook facility
Bill payment, ECS facility
Email statements
Locker facility
Cash and cheque deposit

This makes this account just like a regular savings bank account without the condition of minimum account balance.

Types of zero balance savings bank account:

There are different types of zero balance savings account to suit the different customers who may open these kinds of accounts:

Basic Savings Bank Deposit (BSBD)
Basic Savings Bank Deposit – Small account
Jan Dhan Account
Salary account
Pension account
Children account

Each of these accounts have no penalty in case the balance in the account is zero. However, their uses, terms and conditions are not the same. For esxample, there are restrictions on cash deposits and credits in a BSBD account. Similarly, there are restrictions on the funds withdrawn. A childrens account is linked to the parent or guardian’s account and is primarily meant to teach children how to operate a bank account. A salary account is like a regular savings account where salary gets credited. However, if the salary is not credited for a few months at a time, then this account will get converted to a regular savings account.

A zero balance savings bank account has some terms and conditions that you must read when you decide to open this type of account.