Zero Balance Savings Accounts: Features, Benefits, and How to Open One
5 min read | about 2 months ago
Savings accounts are the commonest financial products out there today. You’ll find them available at every bank and financial institution. Yet, while setting up a savings account is highly recommended to start your financial journey, you will have to abide by a few regulations regarding the same. This includes sticking to the monthly average balance (MAB) or minimum balance guidelines for your savings account. This means that you cannot withdraw as much as you need, if it ends up violating these guidelines.
If you do not want an account with these restrictions, then a zero balance savings account may be the answer. It is often provided by several small finance banks, NBFCs, and even regular private/public sector banks. Let us look at the key aspects of these accounts below.
What are Zero Balance Savings Accounts?
Zero balance savings accounts are deposit accounts that do not have minimum/monthly average balance requirements. You do not have to pay any account maintenance charges or penalties for not maintaining the MAB in this case, like other regular savings accounts. Hence, the core concept is that you can keep your account active even with zero balance. Some banks even have QAB or quarterly average balance requirements for their savings accounts. Zero balance accounts do not have these restrictions as well.
Key Features & Benefits
Whenever you open a zero balance savings account, there are several features and benefits that you can expect to get. Some of them include the following.
No Minimum Balance Requirements
This is the biggest benefit cum feature of zero balance savings accounts. The name itself shows that you can operate it as a zero balance account without having to maintain any minimum balance (or worry about subsequent penalties for zero balance). It is the biggest attraction for most customers who choose to set up these accounts.
Seamless Transactions
Just like regular savings bank accounts, their zero balance counterparts also offer easy payments and transaction facilities through net banking or mobile banking. You can easily pay your electricity, water, phone, and other utility bills through these accounts or send/receive money without any hassles.
Net & Mobile Banking
Mobile banking and net banking are two useful features offered by zero balance accounts as well. You can easily check your account statement, receive or send money, and take care of other tasks through your official mobile banking app or the net banking portal of the bank. It will help you save time and energy considerably.
You will also get all other features of regular savings bank accounts, including debit cards, checkbooks, passbooks, etc.
How to Open a Zero Balance Savings Account
Opening a zero balance savings bank account is an easy process that will not require much time. You can do it offline by visiting the nearest local bank branch and taking help from the customer representative. You can fill up the account opening form, while submitting documents like your address, identity, and income proof, along with a passport-size photograph (the requirements may vary across banks). The bank will verify your details and notify you via email or SMS about the same.
The process can also be carried out online through the bank’s official website. You can fill up the application form and upload digital copies of the documents you need. Video KYC verification is often done before the bank provides your account number and customer ID. You can then set up your net banking and mobile banking accounts by creating your passwords.
Should You Choose a Zero Balance Savings Account?
Now the question comes- should you opt for a zero balance savings account? The answer is yes, if you’re looking to be free of minimum balance restrictions and subsequent penalties or account maintenance charges. However, do note that zero balance accounts often have limits regarding the number of transactions that are allowed each month. Sometimes banks allow up to four withdrawals, with extra withdrawals leading to your account being converted into a regular savings account by the bank. Some banks may also charge some fees for additional transactions.
Also, based on the RBI (Reserve Bank of India) directives, you can only have a single zero balance account with one bank. You cannot hold any other type of savings account in the same bank. You also have to provide a declaration to the bank while setting up your zero balance account, stating that you do not have any such zero balance account in any other banking or financial institution. So, if you’re looking for the flexibility to make multiple and higher withdrawals in case of sudden financial needs, then a regular savings bank account could be a better solution.
Conclusion
So, keep these above points in mind before finalizing your decision to open a zero balance savings account. These accounts undoubtedly free you from minimum balance restrictions and promote higher financial inclusion, although they do have withdrawal limits that you need to be careful about. You can check out leading institutions like Unity Small Finance Bank who offer savings accounts with attractive features that are tailored to almost all customer needs.
About Unity Small Finance Bank
Unity Small Finance Bank is committed to making banking simpler and more accessible for everyone. Our services include Savings Account, NRI account, Current Account, Fixed Deposits, and Personal Loans offering flexible tenures and attractive interest rates. We also offer financing options like MSME Loans and Microfinance to support businesses and underserved communities. Learn more about Unity Small Finance Bank here.
