How to Open Zero Balance Savings Account: Meaning, Benefits, Process & Steps

An account that lets you deposit your money is known as a savings account and is offered by the bank. Banks typically provide savings accounts requiring you to retain a minimum amount. You will be required to pay a monthly charge if you don't. However, some savings accounts—known as zero-balance saving account—do not require a minimum amount. It's a straightforward concept that helps you open a savings account, but you're not required to keep a certain minimum balance. Read this article to learn more about Zero balance Saving accounts, their benefits, drawbacks, and more.

Benefits Of A Zero Balance Savings Account 

There is no required minimum balance.

This account has no balance, as implied by its name. Consequently, you are not required to keep a certain minimum balance. As a result, there is no fee for a negative account. The primary attraction for customers when opening this kind of account is this.

Simple transaction

Payments can be made using this account using a variety of NetBanking services. This account can pay for services like phone, water, and electricity.

NetBanking and mobile banking

Through NetBanking features, you can send and receive money and monitor your bank statements. Additionally, you may control everything using a smartphone or a laptop.

Drawbacks Of A Zero Balance Savings Account

Savings can be done without worry with a zero-balance Savings Account. However, some disadvantages could harm your banking experience:

Transaction Restrictions

With zero-balance accounts, there are monthly transaction limits that must be met. Banks usually limit withdrawals to four per month. If you make more withdrawals than are permitted, the bank will turn your account into a regular Savings Account. Some banks may even charge you a basic penalty for this.

A limited number of savings accounts

As per the Central Bank of India's new regulations, each bank can only keep one Zero Balance Account. Additionally, you are not allowed to maintain any other Savings Accounts of any other capacity at the same bank if you already have a Zero-Balance Savings Account there. When registering for a Zero-Balance Savings Account, you must provide a declaration to the bank declaring that you do not currently have a Zero-Balance Account with any other bank.

How To Start A Zero Balance Savings Account?

Zero balance savings account banks in India provide online and in-person options for opening accounts.

The procedures below are for you if you prefer using offline banking services:

Step 1: Go to the nearby bank branch.

Step 2: Ask the bank representative about the account with a zero balance.

Step 3: Request an application for account opening.

Step 4: Carefully complete the form and submit it along with the necessary paperwork, including a passport-size recent photo of you and proof of your address, identification, and employment.

When the bank authentication is successful, the bank will send you an email or SMS to let you know.

Follow the instructions for opening zero balance savings account online from the comfort of your home rather than physically visiting the bank.

Step 1: Go to the desired bank's official site using a laptop or mobile device.

Step 2: Examine the options for Zero balance accounts and start the process by submitting the application required to create a Zero balance savings account.

Step 3: Complete the application form and submit it with a digital copy of each required document, such as an Aadhar or Pan card.

Step 4: Complete an online video KYC to get your identification verified.

The bank will provide you with a customer ID and account number if the bank verification is completed.

Step 5: Log in using net banking or mobile banking once you have your customer ID and account number to set up a password and start your online transactions.

Zero Balance Savings Account Vs. Savings Account

You have already seen how similar these two categories of savings accounts are. But you must be conscious of their differences to choose wisely between a zero balance account and a regular account. So let's examine the primary distinctions in more detail.

  1. Minimum balance specifications

The minimum balance requirement is, of course, the main distinction between these two categories of savings accounts. You'll need to keep the minimum balance in a basic savings account. However, if you choose a zero-balance account, you can maintain a negative balance without penalties.

  1. The maximum number of accounts that can be opened

There is no limit to the number of standard savings accounts you can open with various national banks. On the other hand, zero-balance accounts are restricted by the RBI to a single account per person. Therefore, if you already have an account with a zero balance, you cannot open a new one without terminating the current one.

  1. Remittances transferred abroad

If you have a conventional savings account with a bank, you can use the money in that account to conduct international payments. However, no international transfers can be made if your savings account is empty. Foreign transaction fees will undoubtedly be assessed following your bank's terms and conditions.

Which Should You Choose Between A Standard Account And A Zero Balance Account?

You can choose more readily if you know the similarities and distinctions between these two sorts of accounts. The final verdict can be summarised as follows.

Use a zero-balance account to receive money on your savings without worrying about keeping a minimum level in the account. On the other hand, if you currently have a zero balance account, your only option, if you're looking to open a bank account soon is to choose a standard savings account.

Bottom Line

To sum up, a zero balance saving account is a kind of savings account that does not need to maintain a minimum balance. This type of account is advantageous for those with low income who cannot keep a minimum amount in their account. The ease of hassle-free transactions without the worry of maintaining a minimum balance are just a few features and advantages that zero balance accounts offer, as was already highlighted in this article. In general, anyone seeking a practical and affordable approach to saving money may consider opening a zero-balance savings account.

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