There are ample benefits to maintaining a savings account in the bank. Primarily, the money an individual earns and saves will generate decent returns when deposited in a savings account. However, almost every other bank asks depositors to maintain a minimum balance in their savings accounts. It can be frustrating for some people. In such a case, they should look for a zero balance account or no minimum balance account. To understand this bank facility, an individual should start with the basics. This article discusses everything about zero-balance accounts.
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What is Meant by Zero Balance Account?
Generally, when a person opens a savings account with the bank, he is asked to comply with the bank’s terms for maintaining a pre-specified minimum sum of money in his savings account at all times. If the same person fails to maintain the minimum balance in the savings account, he is penalized. A zero balance account, on the other hand, eliminates this issue.
A zero-balance account can be described as a savings bank account with no minimum balance requirement and is not charged. This facility provided by the banks encourages more people to save their funds. A depositor can enjoy the usual facilities the banks provide to a regular saving account holder with a zero balance account, despite the nil balance.
What are the Key Features of a Zero Balance Bank Account?
The following are the key features of a zero-balance bank account:
No Minimum Balance Requirement
The most significant feature of a zero account balance account is that it requires no minimum balance. A savings account holder at a specific bank can now maintain a zero balance in his account without worrying about penalties or charges. Moreover, an individual will not lose the rights to any bank facilities that come with the savings account, regardless of the balance.
Free Facilities
When it comes to bank facilities, a zero balance account can offer many facilities to the depositor. For instance, he gets a free passbook along with his savings account. An account holder can also deposit cash and checks without any cost at any branch of the bank with which he has opened the savings account.
In addition, depositors can have access to internet banking. Safe deposit lockers, ATM withdrawals, a debit card for easy transactions, etc., are other facilities that one can get with a zero balance account. Such facilities make banking much more accessible.
Easy Transaction Support
A zero-balance bank account enables depositors to carry out multiple transactions. For instance, account holders can pay for various utilities, such as internet, water, electricity, mobile recharges, and more, using the money deposited in their zero-balance account. Furthermore, depositors can make digital payments via online payment modes like PayPal. All they need to do is link their zero-balance bank account with the payment channel.
Mobile Banking
Zero balance accounts allow depositors to create an account on their bank’s mobile banking app. This facility enables them to carry out several transactions, including fund transfers, adding beneficiaries, opening or closing fixed deposit accounts, and more, with their smartphone. Mobile banking makes it possible for people to enjoy banking on the go.
Internet Banking
By opening a zero-account balance account, people can also transact via their bank’s internet banking portal. With internet banking, account holders can quickly check their savings account balance online, pay shopping bills on online portals, and carry out other vital transactions from their homes without visiting the bank branch for every transaction.
Interest on Account Balance
A zero-balance account is fundamentally a savings account. So, like all savings bank accounts, a zero balance account also offers interest on the balance at the pre-specified rate. Usually, the interest rate on a zero-balance savings account can be lower than what’s offered on a fixed deposit account. But it still helps earn decent interest on the sum lying idle in the account.
Conclusion
Now that an individual knows what a zero-balance savings account is, how it works, and its key features, consider opening one, especially if he is having trouble maintaining a minimum balance. However, before opening a zero-balance account with no minimum balance requirements, consult with the bank for restrictions on the account to enjoy all its benefits without any issues.