6 things to know before opening an online zero balance savings account

The advent of digitalisation has brought banking facilities right to your door. With a zero-balance Savings Account, you can avail yourself of all required banking services without the compulsion to maintain a minimum balance in your account.

With this option, banking has become more convenient and flexible for account holders. Before you open online savings account with zero balance, here are six things you should know to make an informed decision.

What is a Zero-Balance Savings Account?

A zero-balance bank account is a type of Savings Account that you can open at a bank without a minimum balance requirement. This allows you to access basic banking facilities without financial stress, which is highly beneficial for low-income groups and first-time account holders.

Online Savings Account opening with a zero balance: 6 things to know

1. No minimum balance requirement

A major perk of a Zero Balance Savings Account is the relief from minimum balance requirement as an entry point to access various banking facilities. This is different from a standard Savings Account, where you have to maintain a certain account balance to avoid deductions for insufficient balance.

This is a good option for first-time account holders or minimum-wage salaried employees. The option of an online Savings Account opening with a zero balance is also preferred by parents who want to introduce children to banking while teaching them about saving from a young age.

2. Digital account opening process

Most banks offer a seamless account opening process for their Zero Bank Savings Account. You can open savings online via the chosen bank¡¯s app or website from the comfort of your home. Begin by filling out a form and submitting all the listed documents for KYC. This includes:

• Adhaar Card
• PAN Card
• Passport-size photo
• Your Adhaar-linked mobile number.
• Some banks also offer video KYC, eliminating the need to visit a branch in person.

3. Limited features

Zero Balance Savings Accounts offer basic banking services such as withdrawals, deposits, online transactions, debit cards and more. However, there may be certain limitations, including -

• Lower transaction limits
• Restrictions in using chequebooks or demand drafts
• Limited access to premium banking services

When opening an online Savings Account with a zero balance, always review the bank's list of benefits and limitations. This will help you make better financial decisions.

4. Free Debit Card and online banking services

A Zero Balance Savings Account provides you with the standard Savings Account benefits such as:

• Debit Card
• UPI transactions
• Mobile banking facilities
• Bill payments and fund transfer
• Net Banking, etc.

The facilities, as mentioned above, help account holders carry out essential banking tasks and make payments for their purchases without being compelled to maintain a minimum amount in their Zero-Balance Savings Account.

5. Interest rates and charges

The rate of interest for a Zero-Balance Savings Account is equal to that of a regular Savings Account. However, the penalty charges involved can be steeper under certain circumstances. Common scenarios can be:

• ATM withdrawals beyond the free limit
• Fund transfers to other banks, etc.

6. Potential overdraft fees

If not managed carefully, you can be subjected to overdraft fees if a transaction exceeds the available balance.

Conclusion

Completing an online Savings Account opening with zero balance is a great option for those looking for convenience and accessibility. However, before opening one, ensure you understand the specific features, limitations and fees of the bank you choose for a seamless banking experience.