Saturday, April 17, 2021

Can open zero balance account in any bank

There is a general rule for minimum balance in accounts that should be followed by all account holders failing which one will be penalized. However, it may not be possible for everyone to maintain this. If asked for solution, there is one. This is called Basic Savings Bank Deposit Account (BSBDA). Everybody can happily use a zero balances account. Let’s go through this here.

There are no limitations for anybody to open such an account. This account can be opened with zero balances. There is no mandatory minimal balance. Minimum balance rule is only for regular saving accounts in which failing doing so will attract penalties. But, basic savings account doesn’t need minimum balance, and therefore no penalties. Reserve Bank ordered all banks to provide Basic Savings Account.

Interest rate benefits.

The interest rate is the same as regular savings account. Therefore, account holder don’t lose on any interest rate. In the same way, one can use ATM, deposits, withdrawals and online transactions as usual.

Limitations and drawbacks.

Some banks are framing unreasonable regulations to open such an account. They are allowing people based on their age and their income. But Reserve Bank clearly stated that no such rules to be applied, which some banks are not following.

One can deposit money any number of times, however withdrawal is limited to only 4 times a month through any mode like ATM, direct bank, online RTGS or NEFT. In general savings account, KYC should be strictly followed before opening but basic savings account can be opened without such. Basic savings account are initially for 1 year, which can be extended later.

Single account only.

One can open only a single basic account. If you have a regular savings account in the same bank, it cannot be converted into basic account. Another drawback is that if a person holding a normal account opens a basic savings account, the general savings account needs to be closed within one month of a opening basic account failing which the bank itself will do so. those who doesn’t use bank much and those who cannot maintain minimum balance can enjoy these basic saving account. This is most useful for students, low-income groups and senior citizens.

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