Reasons why zero balance accounts are better than regular savings accounts

Many people are using several bank accounts per wish, but the primary intention is to save money and keep it secure. But sometimes, maintaining the minimum balance becomes a difficult task. To rectify this situation, many banks offer customers to have zero-balance accounts. In this, you don't need to maintain a minimum balance. To open a zero balance account online, you have to visit the bank's official website and finish the account opening formalities. Let us see how zero balance accounts differ from regular savings accounts and which account gives more functionalities below:

Minimum balance:

The ultimate goal of having a zero-balance account is to reduce the stress of maintaining the minimum balance. While opening a zero balance account, they insist you deposit a minimum amount, similar to other accounts. But you can use the amount further. In a savings account, you need to maintain a certain amount as a minimum balance. If not so, you should pay some penalties to the bank. Zero-balance accounts have no penalties or charges for maintaining a minimum balance. Generally, the interest rate of both savings accounts and zero balance accounts are the same. The interest rates may vary according to the bank's terms and policies.

Non-KYC balances up to 1 lakh:

KYC, knowing your customer is a step done for security purposes. While opening a savings account, you should do the KYC process to utilize the services of a regular savings account. Children and students who don't have proper documents for KYC can skip this process, but their accounts will be restricted with a few services. You can open a zero balance account online without the KYC process and utilize the services up to a certain limit. These accounts allow you to skip the KYC process until your account balance crosses one lakh (INR). If so, you should be asked to do the KYC.

Free transaction:

Most of the zero balance accounts don't charge transaction charges for money transfers like NEFT, IMPS, and more. Some banks may have a free transaction limit for zero-balance accounts. Whereas in a savings account, you can do free transactions up to a certain limit. Typically free transactions for savings account ranges from 3 to 5 per month. If it exceeds, you will be charged with a certain amount. As mentioned above, these services and charges may vary according to the bank's terms and policies.

Active money facility:

In case you idle money in a zero-balance account, you will get interest for that particular amount. You can withdraw the amount when you need. You will constantly earn interest for the amount you have in your account. But in a savings account, you might have some investment schemes like term deposits where you can't withdraw money for a certain period. You wanted to keep that amount for a certain period to earn more interest. Investment schemes are optional, and it's up to you to choose them or not.

To conclude:

The above-mentioned are the key differences between a savings account and a zero balance account. You can opt for the one that suits and benefits you more—looking to open a zero-balance account? If yes, you can open an online zero-balance account to save time and effort.