Difference Between Minimum Balance Savings Account And Zero-Balance Savings Account

by Shashank Bhaskar Finance Adviser

Opening a saving account is one of the ladders towards nurturing a habit of saving money. More significantly, it’s simple to open one and manage it. With a limit on cash transactions, it has become even more essential to open a savings account to do financial transactions.

With most banks having net banking facilities on your savings account, you can manage all your financial transactions online. The net banking option can be initiated on your account with just an iPIN. It allows you to transfer funds online through either IMPS, NEFT or RTGS from the comfort of your home or office. These facilities are applicable through mobile banking apps too.

Opening a savings account for your money is a better choice than just keeping it idle in your house. Besides, money kept in the house is a devaluing asset. By depositing your money in a savings account, you can earn interest on it. With a debit card and ATMs around every nook and corner, you can have 24*7 access to your funds.

Very few products in the market give you the twofold benefit of liquidity and interest. Once you open a savings account, you can make use of it to manage your money better and fulfil your short-term financial goals easily.

There are all kinds of saving account alternatives offered by banks. There are savings accounts for kids, women, pensioners and some to suit the lifestyle and financial needs of people from all backgrounds.

Broadly, there are two kinds:

·         A zero balance saving account

·         A minimum balance maintenance account

Minimum balance savings account

Some savings accounts have a compulsory minimum balance requirement. It means that the account has to have a sufficient bank balance for it to be active. Many banks require having a specified minimum balance in the account to either open one or for the account to get active.

Therefore, the “minimum” balance must be sustained over a certain period as well. If you are unable to maintain the required balance, you get levied a non-maintenance penalty.

Zero balance savings account

Most Indian banks now have Basic Savings Bank Deposit Account (BSBDA), or in other words, a zero-balance saving account. No penalty, and you can use your BSBDA account as a regular savings account. It is the one where the account holder can operate the account without the requirement to maintain a minimum balance.

Typically, this kind of account is made available to salaried customers or salary account holders who get a monthly income credited to their account. Centred around the Pradhan Mantri Jan Dhan Yojana (PMJDY), which is a program by the Indian Government that calls for financial inclusion, banks need to offer zero-balance saving account to their customers.

It is advisable to go for public sector banks if you want to open a saving account with a low minimum balance. Once you have an account opened, the next step is to open a fixed deposit to invest your savings. 

Sponsor Ads

• Ad Space Available - Rent it Now!

Created on Nov 11th 2019 00:42. Viewed 679 times.

Comments