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Setting the Facts Straight on the Zero Balance Savings Account


Banks offer different types of accounts to their customers. One of them is a zero balance savings account. This type of account doesn’t require the customer to maintain a minimum monthly balance or MAB. It is also called a Basic Savings Bank Deposit Account (BSBDA) or better still, a zero balance savings account.

Typically, in a normal account, when the account balance doesn’t meet the MAB, the bank levies a non-maintenance charge. However, there is no MAB charge on a zero balance savings account. There are other benefits too which we will see later.

Accounts offered under the GoI PMJDY scheme come under this category

All accounts opened under the Government of India’s ambitious Pradhan Mantri Jan DhanYojana are zero balance savings accounts. This scheme was launched by the Department of Financial Services, Ministry of Finance, Government of India on August 15th, 2014.

This product is targeted at the poor and marginalized who don’t have a bank account but who may not be able to maintain a minimum balance in their bank account on a regular basis. Such accounts have become so popular that today all major banks offer such products. However, it is also seen, people have many questions about zero balance accounts. This post aims to dispel the myths and set the record straight about this innovative product.

Free ATM/Debit card

Zero balance savings accounts are eligible to receive a free ATM-Debit card (only in public sector banks) on the bank’s expense. Some private banks offer virtual debit cards instead. The ATM or ATM-Debit card can facilitate transactions worldwide.

Free cheque book

Zero balance savings account holders are eligible to a free chequebook containing a fixed number of leaves every year (public sector banks only). All subsequent cheque book requests will be charged.

Complimentary passbook

Zero balance savings accounts also receive a complimentary passbook (public sector banks only) after account opening.

Internet banking facility

Zero balance savings accounts can apply for internet banking facility to conduct online transactions. Standard charges will be applied for money transfers. Some private banks don’t charge for this facility.

Special facilities for salary account holders

You can also convert your zero balance savings account into a salary account in which case you are eligible for further benefits and privileges, depending on which category your company or institution falls under.

Zero balance savings accounts come certain conditions

Like other types of bank accounts, zero balance savings accounts have a few restrictions and certain terms and conditions are applicable to them. For instance, some banks in India have a condition that the total credit into your zero balance account in a year, shouldn’t be more than Rs. 1 lakh.

You can get a zero balance account only after submitting Know Your Customer documents to the bank where you’ve applied for the account. Other terms and conditions might apply, depending on the bank you’ve chosen.

It is recommended, you keep using the zero balance savings account on a regular basis because otherwise, the account may become dormant. Once that happens, you won’t be able to conduct any transactions from it, including transactions over the phone, internet or even ATM. If that happens, you’ll have to re-activate the account to continue to enjoy its benefits. We hope, this article has increased your knowledge about zero balance savings accounts.


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