Know the benefits of Zero Balance Savings account

Savings account in a bank is considered as the most traditional form of investment for it gives us the dual benefit of liquidity and interest.

There is another form of account, Zero Balance Savings Account, which can be suitable for those who want to keep them away from the hassle of maintaining a monthly average balance (MAB).

Under savings account, you can save money, transfer funds, withdraw money and also earn interest on your deposits. It also comprises specialized accounts for kids, savings account for women, pensioners savings account besides lifestyle and usage savings account.

Under the Zero Balance Savings Account, interest rates are calculated on the minimum account balance and are usually credited on half yearly basis or quarterly basis depending on the savings account type and the bank’s rule.

At present, many banks are offering interest rates ranging between 3.5% and 7% depending on the deposits made in such accounts.

Many banks use the terms minimum daily balance, minimum quarterly balance or just minimum balance. Average balance means the amount that has to be maintained in your savings account over a certain period of time.

However, in the Zero Balance savings account, you need not maintain a minimum balance. Such accounts are offered to a certain category of customers like salary account holders and through Pradhan Mantri Jan Dhan Yojana (PMJDY).

For opening such account, one is needed to submit basic KYC documents.

Accounts opened under PMJDY will have free passbook, free Personalised Rupay Debit Card and free cheque leaves.

According to RBI guidelines, Basic Savings Bank Deposit Account or BSBDA is now offered by all banks. A BSBDA has no minimum balance requirement and the customers are offered debit card.

BSBDA is also referred as zero-balance account but banks may offer the zero-balance flexibility to other types of savings account variants.

Click here to read the full story.