Most leading lenders of the country offer the option of opening a zero balance savings account in order to encourage people to make investments. Zero balance accounts are saving accounts where average monthly balance (AMB) rule is not applicable. Average monthly balance (AMB) is the minimum average of deposits required by the bank customers in their savings bank accounts. The idea of opening a zero balance account is simple. Customers can open a savings account, but they don't have to maintain a minimum balance for it. Despite this, the banks provide the usual facilities that come with a regular savings account.
Country's largest lender State Bank of India (SBI) offers the facility of opening a zero balance account in the form of a basic savings bank deposit (BSBD), no frills account, among others. Private sector lenders HDFC Bank and ICICI bank also offer the option of opening a BSBD account, wherein the customer is not required to maintain any particular minimum balance. Customers get a number of facilities such as free debit and ATM cards and internet banking with BSBD account.
Given below are facilities and interest rates offered by SBI, HDFC Bank and ICICI Bank on zero balance accounts:
State Bank of India (SBI):
SBI's BSBD account, a zero balance account, can be opened by any individual provided he/she has valid KYC (Know Your Customer) documents. It is primarily meant for poorer sections of society to encourage them to start saving without any burden of charges or fees. SBI's BSBD account can be opened singly, jointly, or with either or survivor, former or survivor, anyone or survivor etc. facility, noted SBI on it's corporate website-sbi.co.in.
The customer cannot have any other savings bank account, if he/she has a basic savings bank deposit account. If the customer already has a savings bank account, the same will have to be closed within 30 days of opening a basic savings bank deposit account. There is no minimum and maximum deposit limit on a SBI's BSBD account. SBI's BSBD provides an interest rate of 3.5 per cent on a balance up to Rs 1 crore and 4 per cent on a balance above Rs 1 crore, same as the savings bank account.
HDFC Bank's BSBD account can be opened by any resident individual who do not have any other banking relationship with the lender. HDFC Bank's BSBD account is a zero balance account and no initial payment is required to open it. The additional features of BSBDA include a free rupay card. Besides this, customers can also avail other features of BSBDA, such as bill payment options, statements and alerts. HDFC Bank also offers special features on BSBDA, such as the option of an international debit card and safe deposit locker.
In a HDFC Bank's BSBD account, the total balance should not exceed Rs. 50,000 at any point of time.
On account balance above Rs. 50 lakh and above, HDFC Bank offers an interest rate of 4 per cent. On account balance below Rs. 50 lakh, HDFC Bank pays an interest rate of 3.5 per cent.
ICICI Bank's BSBD account is available for Indian residents above the age of 18 years only. Customers opening a BSBD account with ICICI Bank also get a free Rupay Card facility, free cash deposit/withdrawal facility and free passbook facility.
The interest rates offered by ICICI Bank on BSBD accounts are the same as those on savings bank accounts. For the balance lower than Rs. 50 lakh, ICICI Bank offers an interest rate of 3.5 per cent per annum. For balances over Rs.50 lakh, the lender offers an interest rate of 4 per cent per annum.