Zero balance savings account – All you have to know about it (Detailed)
Zero balance savings account: Opening bank account has become very easy since the Modi government has taken the leap to transform the economy by bringing the large section of individuals who still do not have a bank account. Though opening a bank account is very easy, it has been counter balanced by the minimum average balance requirement discouraging those who can’t afford it from coming to the bank. However, zero balance savings accounts are very good alternative for them. Below are few important things one must know in the context of zero balance savings account.
No minimum Balance requirement:
The biggest advantage of this account is that it can be opened no minimum balance requirement. Post demonetization banks have increased the minimum average balance to be maintained in savings account. This limit changes from metro city to rural and semi-urban areas. In such context, it has become difficult for economically deprived people to maintain a savings bank account in metro cities given the high amount of minimum balance requirement. For them this is big relief.
As per RBI, An individual is eligible to have only one ‘Basic Savings Bank Deposit Account’ in one bank. He will not be eligible for opening any other savings account in that bank. If a customer has any other existing savings account in that bank, he / she will be required to close it within 30 days from the date of opening a ‘Basic Savings Bank Deposit Account’.
Banks are advised by the Reserve Bank of India not to impose restrictions like age and income criteria of the individual for opening BSBDA.
No need to worry about penalties:
Imagine a case, in which you have urgent requirement of money, but the balance in your savings account will fall below the minimum balance limit if you withdraw. In such case you may hesitate to withdraw from your own money worrying more about the penalties that may be levied by the bank. But this is not the case when it comes to savings bank account.
Similar rate of interest:
Just because of it is zero balance account, you do not need to worry about the rate of interest that is earned on the account balance. The rate of interest would be as same as that on the regular savings account.
Facilities such net banking, cheque book etc:
Zero balance savings account are no different from the regular savings account in terms of the other banking facilities such as net banking, ATM card and cheque books.
Conversion of existing bank account to zero balance savings account:
Those who want to convert their existing bank account to zero balance savings account can do so by giving their consent in writing to the bank. No extra charges shall be charged for this.
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