Opening Zero Balance Account

Introduction

Managing all the financial transactions from one account can be a cumbersome process. This especially happens for big businesses, as they go through several money-related deals every day. Some of them include wages, salaries, operating expenses, machinery costs, etc.

If the company operates in multiple business verticals, it’s important to have a separate bank account for conducting the day-to-day financial transactions. However, this is not just for businesses but also for individuals who want to add discipline to your financial regime. Zero balance account provides everything you need in one go. You can use this account to save your money or to operate it for separate business transactions.

Zero Balance Account in India

The master bank account consists of all your banking details. It’s a central channel for conducting the financial proceedings. The zero balance account acts as a cover to the master account. The user sends the desired amount from the latter to the former as per the cost of the transaction. The whole process is automated, but with proper approvals unlike debit and credit cards which have swift access to the funds whenever required.

The best part about this account is that you don’t need someone to supervise or manage. It removes manual interaction and saves enough time for the account holder. Additionally, it helps you to take charge over your finances, putting a nut to the bolt on unwanted outlays. There won’t be any human errors as everything is operated online, so the chances of transaction failure are minimal.

What’s required to Open a Zero Balance Account?

Banks have certain minimum requirements before they’ll consider opening ZBAs attached to your main business account. Zero balance account banks may have their own unique sets of qualifications, but here are some common ones −

• Your company must be a registered business.

• You must already have a primary business account.

• Your business must be established with enough cash flow to warrant the ZBA accounts, as the bank will now be doing a lot of the work for you.

Application for Zero Balance Account

The bank you are applying for a zero balance account is where you should already have the master account held for linking purposes. You can open the zero balance account either online or offline as per your convenience. The list of things you need to furnish to the bank for account opening includes past data consisting of all your previous transactions, anticipating spending, credit history, etc.

How to open a zero balance account online?

Here’s the step-by-step process of opening a zero balance account online.

Step 1 − Go to the respective bank portal where you decided to open your account with.

Step 2 − Once you identified the zero balance account option, click on it and take the form.

Step 3 − Fill all the necessary details on the portal correctly.

Step 4 − Attach all the documents required for KYC and verification purposes.

Step 5 − After that, cross-check the details you wrote to ensure it’s true to your knowledge.

Step 6 − Finally, click on submit to process your application.

How to open a zero balance account offline?

Zero balance savings account banks in India provide online and in-person options for opening accounts. Below is an easy way to open zero balance account offline.

Step 1 − Visit the nearby banking institution.

Step 2 − Speak to respective banking executive and ask the zero balance account details.

Step 3 − Upon availability, ask for the application for the same.

Step 4 − Finish the paperwork and application form properly and attach necessary docs and submit to the bank.

Who can open a zero balance account?

The zero balance account is not offered to regular individuals but only to organizations, both private and public. Besides, the entity or the company should be functional and not unestablished or running small businesses.

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.

Some banks charge fees, so ask about these before setting up ZBAs. You may still come out ahead when you pay fees because the bank takes some of the work off your plate. And when your funds move up into the primary account to invest or earn interest, putting the money to work may cover the cost of fees associated with setting up a ZBA.

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.

Conclusion

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.

FAQs

Q1)Can I set my ZBA to maintain a specified amount other than zero?

Ans)Yes, you can work with your banker to maintain residual cash in one or more ZBAs by designating a target other than zero.