A savings account is a deposit account which is used by customers to park their money in exchange for a small interest rate on it. Most savings bank accounts require you to maintain a minimum balance which can be anything between Rs. 3000 to Rs. 1 lakh.
However, in consideration of the underprivileged sections of society, RBI has mandated that all banks should also offer a zero balance savings account (also known as basic savings bank deposit account, BSBDA) feature wherein you don’t have to maintain a minimum balance and also receive a debit card for no extra charge.
Below are a few smart things you should know about a zero balance savings account.
- No Minimum Balance
As already mentioned above, the prime feature of a zero balance savings account is that you don’t have to maintain a minimum balance and you still don’t incur any penalties on it.
- Is a Good Secondary Account
You can open up a zero balance savings account so that you can manage your regular savings bank account more efficiently.
- Same Rate of Interest
The rate of interest is the same as that available on regular savings bank accounts. Furthermore, you’ll also be able to avail of all the same regular features such as ATM cards, cheque books, withdrawal of cash from bank branches, and online fund transfers.
Banks generally follow a set of criteria when they’re granting you a zero balance savings account. However, the RBI guidelines suggest that they can’t impose restrictions based on age or income.
RBI hasn’t imposed any restrictions either on deposits or withdrawals. However, certain banks have placed their own limits on the number of withdrawals a month. You can deposit as many times as you want. However, you can only withdraw four times a month, from any source. Beyond that, it’s the bank’s prerogative whether they want to allow you to withdraw more for free or for an additional charge.
- BSBDA vs. BSBDA-Small Account
If an account is opened using a simplified KYC form, then it will automatically be treated as a BSBDA-Small account and there will be certain restrictions. In this case, the aggregate of all credits in a year can’t exceed Rs. 1 lakh. The aggregate of all withdrawals and transfers can’t go beyond Rs. 10,000 a month, and the balance in the bank should never exceed Rs. 50,000.
So now that you’re all caught up on the important features of a zero balance savings account, you can go ahead and open that account!