A savings bank account is the most basic kind of bank account where you deposit your money for safekeeping. Some savings accounts require you to maintain a minimum balance. If your balance falls below this minimum amount, you need to pay a maintenance fee. Certain savings accounts do not have a minimum account balance requirement. Such an account is called a zero-balance savings account.
Digital zero balance savings accounts are becoming increasingly popular. That’s because they offer complete access to all your money without any additional charges. Read on to learn about this type of savings account and the multiple benefits that contribute to its popularity.
What is a zero-balance savings account?
It is a kind of savings account where you do not need to bother with maintaining a minimum balance. This is where it differs from a regular savings account with a specific minimum balance requirement. If you fail to meet this threshold, you may incur penalties, or the account might even be closed. A zero-balance account comes with the benefit of not imposing any additional charges.
Benefits of a zero-balance savings account
Opening a zero-balance account online has multiple advantages, which make it a popular choice. Here are the top benefits offered by this type of account:
Promotes financial inclusion: A zero-balance account gives people from different income groups’ access to professional banking services, without the need to maintain a minimum balance in their savings account. Whether you are a student, a housewife or someone who has just started their first job, a zero-balance savings account is for all.
Zero penalties: Since you don’t need to maintain a minimum balance in this kind of account, there is no question of paying any penalties for failing to keep that balance. So, there is no cause for worry even if you withdraw your complete money from your account to meet your needs. The account comes with no annual charges, fees or hidden costs.
Simple account opening process: You can open this kind of bank account online or offline with minimum documentation and in a few easy steps. When you open online, the whole process is paperless, making it simple to begin your banking journey. You can even complete the KYC formalities digitally.
Digitisation: A digital zero-balance savings account gives you online banking facilities. So, you can check your account balance, deposit money, and make payments through the bank’s websites or mobile application. This brings banking services to the fingertips of account holders.
Interest income: Yes, some zero-balance savings accounts offer interest on the money you have deposited. This is especially helpful for people who wish to grow their savings over time, without the limitations of regular account maintenance.
Free virtual debit card: Sometimes, you can get a free virtual debit card by opening an online zero-balance account. The card is ideal for digital payments, such as paying bills and shopping online. This makes your banking experience even more convenient.
Financial discipline: A zero-balance account also helps develop financial discipline by offering different baking facilities and encouraging an account holder to save regularly.
Create an emergency fund: You can open a zero-balance bank account online as an emergency fund to have easy access to money in case of loss of job or a medical emergency. If you treat it as an emergency fund, try to not withdraw money from the account unless it is unavoidable.
Set up e-mandate: You can also set up an e-mandate or auto-debit facility for recurring payments, such as utility bills, loan EMIs, credit card bill payments and SIPs. This feature helps you skip the manual work of initiating transactions. You can also ensure that your payments go on time, which helps to improve your credit score.
To sum up, you can enjoy all the benefits of a savings bank account with a zero-balance account. These range from enjoying a paperless instant account opening, receiving FD-like interest rates and accessing all internet and mobile banking features to getting a virtual debit card for any transactions. Additionally, you avoid paying maintenance charges. This type of account has democratised banking services and allowed people from different walks of life to access them anytime, anywhere.
Whether you are a student or just beginning to earn, this type of savings account can help you grow your funds without restrictions. To start a seamless savings journey or level up your banking experience and save more efficiently, open a zero-balance savings account online today.