It is usually mandatory to maintain a monthly average balance (MAB) in your savings bank account. However, with a zero balance account, unlike normal bank accounts, you are not required to maintain any minimum average balance. Most people who do not maintain a monthly average balance or forget to maintain MAB in their bank accounts opt for a zero balance account. Experts suggest, there is no need keeping such an account active and paying fines on a regular basis.
Most salary accounts are usually zero balance accounts as there are no charges required for non-maintenance of minimum account balance. Non-salaried individuals can opt for a zero balance account offered by many banks which do not require the maintenance of monthly average balance. These days almost all banks, ranging from the State Bank of India (SBI) to HDFC Bank to ICICI Bank, offer the option of opening a zero balance savings account.
Savings bank accounts such as Prime Minister’s Jan Dhan Yojna (PMJDY), Basic Savings Bank Deposit (BSBD) accounts, small accounts, pensioners, minors and all social beneficiary accounts are exempted from the monthly average balance requirement as clarified by SBI, and no charges are levied on them. Depending upon your eligibility and requirement, you can opt for any of these accounts.
For instance, Kotak Mahindra Bank’s 811 Zero Balance Saving Account offers an interest rate of up to 6 per cent per annum. This account can be opened digitally by downloading the Kotak Mobile banking app. With just registering your Aadhaar, PAN and other basic details, you can open this account. Account holders can set up the mobile banking PIN through the app and can start using the account immediately.
Similarly, SBI offers Basic Savings Bank Deposit Account under which account holders can open a zero balance account. There is no upper limit set on the deposit of money and account holders also get a RuPay debit card free of cost with the account. SBI offers zero balance account, at an interest rate of 3.5 per cent for an amount up to Rs 1 crore and 4 per cent for Rs 1 crore and above.
HDFC Bank’s Basic Savings Bank Deposit Account (BSBDA) offers a free-of-cost Rupay card with other benefits like passbook facility, cash and cheque deposits at branches and ATMs free of cost, along with 4 free cash withdrawals per month for all individual account holders. IDFC Bank offers zero balance savings account with various benefits, such as 10 free withdrawals per month, and with a nominal fee account holders can also opt for a visa platinum debit card.
Experts say to increase their customer base, banks offer zero balance accounts these days. Some banks, however, offer zero balance accounts with some conditions like the account holder needs to open a fixed deposit with the bank of Rs 50,000 or Rs 1 lakh or opt for a mutual fund SIP of a certain amount per month.