A Zero Balance Account is a type of bank account that does not require the account holder to maintain a minimum balance, allowing the balance to be zero without any penalty.
A Zero Balance Account is designed to promote financial inclusion by making banking accessible to everyone, including students, low-income individuals, and first-time bank users. Unlike regular savings accounts, there is no minimum balance requirement, so customers are not charged penalties if their account balance falls to zero.
In India, zero balance accounts are often opened under government initiatives or as Basic Savings Bank Deposit Accounts (BSBDA). These accounts usually offer essential banking services such as debit cards, ATM withdrawals, deposits, fund transfers, and access to digital banking. However, some limits may apply on the number of transactions or withdrawal amounts.
Zero balance accounts are ideal for people who want basic banking facilities without worrying about maintaining a balance. They are also used to receive government subsidies, salaries, pensions, and direct benefit transfers (DBT).
"A student opens a zero balance account to receive a scholarship. Even if the account balance becomes ₹0 after withdrawals, the bank does not charge any penalty or fee."