PNN
New Delhi [India], April 26: A Zero Balance Saving Account is useful for everyone. You can open it online and do not have to make a minimum deposit to get started. However, it is especially beneficial for people with fluctuating incomes. Other than this, there are several other circumstances where a Zero Balance Account proves to be useful to you. We’ll explore each of them with you.
When You Cannot Maintain Average Monthly Balance
Imagine you have a savings account with an Average Monthly Balance requirement of Rs. 10,000. Now, if you cannot maintain a monthly balance of Rs. 10,000, the bank will levy an AMB charge. This AMB charge will eventually chip away at your savings.
However, when you have a Zero Balance Saving Account, you are not obligated to maintain a minimum balance. Therefore, if you are someone who cannot maintain an average balance,then a Zero Balance Saving Account will be useful for you.
When You Want Flexibility
When you open a savings account, flexibility is one of the things that you should be expecting. A Zero Balance Saving Account comes with no penalty charge for not maintaining an average monthly balance.
Moreover, there are often minimal or no charges for depositing money into your account. Plus, your account may offer other services, like NEFT, RTGS, or IMPS, at no extra charge, giving you the right amount of flexibility you need.
When You Want Convenience
Many of us lead busy lives and cannot find the time to go to a physical bank branch to complete KYC. However, when you open a digital Zero Balance Saving Account, you can complete a video KYC, making it a convenient option for you.
Some variants of Zero Balance Saving Accounts with limited features and services may not even require full KYC, still making it a convenient choice for people who just want basic banking facilities.
When You Want to Earn Returns
While Zero Balance Savings Accounts do not have the same terms and conditions as regular savings accounts, there is a similarity between them — they both offer substantial returns.
The interest rate on a Zero Balance Saving Account may not be as high as regular savings accounts, but they are still competitive in their category. Therefore, when you deposit money into a Zero Balance Account, you aren’t just saving it. You are also earning returns on it.
When You Want Accessibility
Many sectors have become a part of the digitalization race, and the banking sector is not left behind. So, when you think of banking, you often think about digital banking, which is increasingly accessible.
Zero Balance Saving Accounts are often digital accounts that you can open and operate online through an app or website, no matter where you are. Plus, you can make cashless transactions and even set up e-mandates to automate payments with your Zero Balance Account.
When You Want a Rewarding Experience
Receiving rewards for using banking services feels like receiving a bonus. Many Zero Balance Saving Accounts offer various incentives and rewards on transactions. These rewards may be retail discounts, cashback, and other transactional rewards that can make your banking experience truly rewarding in the literal sense.
When You Want a Beginner-Friendly Account
When beginners open a savings account, they also must learn how to manage it. Now, if you add the aspect of maintaining a minimum balance to avoid penalties, it becomes a stressful experience for them.
Zero Balance Saving Accounts, on the other hand, do away with this hassle. Therefore, people new to banking can save and spend their money without any worries about incurring penalties.
When is Zero Balance Account Not Useful
We have discussed the various circumstances in which a Zero Balance Saving Account is useful. But it is worth noting that it may not be useful in every circumstance. For example, some Zero Balance Saving Accounts may have a limitation on the number of monthly transactions. Plus, since many Zero-Balance Accounts are primarily digital accounts, you may face downtimes in apps or websites when the platform is undergoing maintenance. This may leave you unable to use the banking services for that period.
Some other limitations of Zero-Balance Accounts include limited deposit options and regulatory compliance issues. As per a report, cash is a dominant mode of payment in India, accounting for around 60% of consumer expenditure. This means that many businesses are earning in cash, and to deposit this cash into their account, they must still visit a physical bank branch. As for regulatory compliance issues, KYC is an essential part of your banking experience, especially if you have a digitally operated Zero Balance Saving Account. You have to complete the required KYC and also keep it updated to ensure the bank does not block your account services.
Conclusion
Even with certain limitations, Zero Balance Saving Accounts prove to be useful in several circumstances, as we discussed earlier. So, if you want a simple yet satisfying banking experience, then a Zero Balance Saving Account can be the perfect starting point for you.
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