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Pros and Cons of Opening a Zero Balance Savings Account

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The government has been running the Pradhan Mantri Jan Dhan Yojana (PMJDY) for the last few years in order to encourage people to open a bank account and enjoy financial services like transactions, savings account, loan, pension etc. in a much more effective and efficient manner.

Along with the government, even banks across the country have been working hard to encourage people to open a savings bank account. Banks have now started offering different types of accounts for different sections of the population like kid’s savings account, women savings account, senior citizen savings account, etc. Among the different types of accounts started by the banks, the zero balance savings account is gaining a lot of popularity.

As the name suggests, zero balance savings account does not require you to maintain a minimum balance like in the regular savings account. It also acts as an inclusive program that helps people who do not own a bank account to get access to the banking services without any need to maintain a minimum balance.

Hence this account is providing easy access to financial services such as Savings Account & Deposit Accounts, Remittance, Credit, Insurance, Pension, etc. to all citizens in an affordable manner.

But that said, this type of account also has its share of advantages and disadvantages which are as follows:



No Minimum Balance Requirements

While a regular savings account requires the maintenances of a minimum balance, a zero balance savings account has no such requirement. In other words, accountholders do not have to maintain the required average or quarterly balance in their account to avoid penalties.

Loan and Insurance

Customers who have opened accounts under this schemes are entitled to an overdraft facility of Rs. 5000. This is available against one account per household. Account holder can get accidental cover of Rs. 1 lakh and life cover of Rs. 30,000. (T&C apply)

Internet facility

Zero balance savings accounts comes with the facility of internet banking. Through this facility, customers who did not had a bank account can the benefits of monitor their account balance online, do online banking transactions, pay their utility bills, etc.


Only for Indians

Only residents of India can open a zero balance savings account. No NRIs (Non-resident Indians), PIOs (Persons of Indian Origin) and foreigners can open this account.

Non-Usage of account

If the customer does not operate the account for a specific period of time, the account will be deemed dormant. Non-usage of account means that the customer will be not able to carry out any ATM transactions, internet banking, or the phone banking facility.

Withdrawal limits

Withdrawals under this type of account opened under PMJDY are limited. You can make 4 withdrawals per month at branches and the withdrawal limit is Rs. 10,000. If you want more withdrawal facility, then you will have to convert the zero balance account into a regular savings account.

By going through the above pros and cons, you will be able to decide better on opening a zero balance savings account.

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