In a growing economy like India, most people manage to save only a small sum of money each month and obviously don't want to be penalized on account of not having a minimum balance in their accounts. Most banks have the account holders maintain a specific amount of balance in their accounts; otherwise, they impose a fine that is deducted from the customers' accounts. Some banks, however, let people open an account on which the minimum balance restrictions are not valid. These accounts are called zero balance savings accounts. Here are the things you should know about a zero balance account where a minimum balance does not have to be maintained.
No Restriction on Balance
The biggest advantage that a zero balance account has over a normal savings account is that no minimum amount of balance has to be maintained. While the amount of the minimum balance may vary from bank to bank, but not maintaining that amount in your regular account will result in a fine that will be deducted from your account. In a zero balance account, there are no such restrictions.
Same Interest Rates
The rate of interest on the zero balance account is same as that on a regular savings account. All normal transactional and non-transactional features are available in this account. You can deposit and withdraw cash at a bank branch as well as an ATM, transfer funds online and avail check book facility in this account just like in a regular account.
Eligibility
According to RBI guidelines, banks are not supposed to levy any restriction depending on the age or income of any individual who wants to open a zero balance bank account.
Limited Number of Transactions
RBI hasn't put a cap on the number of transactions. It is the banks who have come up with this. While there is no restriction on the number of cash deposits that can be made, most banks let the zero balance account holders withdraw cash four times a month, be it a withdrawal at the bank branch or through ATM, RTGS, NEFT, EMI etc.
No More than One Account
You can open only one zero balance savings account in a bank. An existing regular savings account cannot be converted to a zero balance account. If you have a regular account in a bank, you must get it closed within a month of opening the zero balance account in the same bank, otherwise the bank itself closes the regular account after a month.
No Restriction on Balance
The biggest advantage that a zero balance account has over a normal savings account is that no minimum amount of balance has to be maintained. While the amount of the minimum balance may vary from bank to bank, but not maintaining that amount in your regular account will result in a fine that will be deducted from your account. In a zero balance account, there are no such restrictions.
Same Interest Rates
The rate of interest on the zero balance account is same as that on a regular savings account. All normal transactional and non-transactional features are available in this account. You can deposit and withdraw cash at a bank branch as well as an ATM, transfer funds online and avail check book facility in this account just like in a regular account.
Eligibility
According to RBI guidelines, banks are not supposed to levy any restriction depending on the age or income of any individual who wants to open a zero balance bank account.
Limited Number of Transactions
RBI hasn't put a cap on the number of transactions. It is the banks who have come up with this. While there is no restriction on the number of cash deposits that can be made, most banks let the zero balance account holders withdraw cash four times a month, be it a withdrawal at the bank branch or through ATM, RTGS, NEFT, EMI etc.
No More than One Account
You can open only one zero balance savings account in a bank. An existing regular savings account cannot be converted to a zero balance account. If you have a regular account in a bank, you must get it closed within a month of opening the zero balance account in the same bank, otherwise the bank itself closes the regular account after a month.
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