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Zero balance digital bank accounts, that are advertised as free or with no minimum balance requirement, sound convenient and the right choice to many people.
However, these accounts come with many hidden charges buried in the fine print. Let’s take a look at some of them.
While you may get a debit card, most zero-balance accounts offer limited free ATM withdrawals. After the limit, you will be charged, usually ₹20-₹25 per withdrawal.
Many banks charge an annual fee for a debit card. Digital zero balance accounts, sometimes, charge a higher annual fee for a physical debit card.
If you don’t use your account for a certain period, like 6 months or more in some cases, banks may charge you fees for inactivity as maintenance fees or for reactivation.
Many zero-balance accounts only offer limited features and ‘lite’ versions of their platforms with restricted services unless you upgrade to a full KYC account.
Most zero-balance accounts have lower interest rates on savings as compared to regular savings accounts. This will impact the returns on your savings overall.
While most banks offer free UPI transactions through zero balance accounts, some limit free IMPS or NEFT transactions. After the limit, a fee is charged for every transaction.
Some banks charge you if an auto payment fails from your account if you have a linked subscription (like Netflix) but your balance isn’t sufficient.
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