The zero balance accounts are gaining traction to the point that they are being hailed as a game changer for banking.
Often banks ask customers to maintain a minimum balance. Sometimes it becomes challenging for many, which leads them to penalties. But, how about a bank account without any minimum balance requirements?
A few renowned banks like Kotak811 offer kotak zero balance accounts. Like any regular savings bank account, it allows you to make deposits, transfers, and withdrawals anytime, anywhere without adhering to the minimum balance requirements. These accounts provide multiple benefits which have become a game-changer move for the banking sector in India.
What is Zero Balance Account?
A standard savings account requires maintaining an Average Monthly Balance (AMB). The AMB varies from bank to bank and location to location. It’s usually more in urban areas than in semi-urban and rural areas. Once your balance falls below the AMB limit, the bank charges you. That means you lose your hard-earned money for non-compliance with the AMB requirement.
That’s where the zero balance account steps in. It’s a self-explanatory term, meaning a bank account that can be opened and maintained with a zero balance. The account stays operational even if there’s no money in it. Better still, the AMB requirements do not apply to zero-balance accounts. Therefore, the risk of incurring extra charges is eliminated outright.
Why Does Zero Balance Account Make Sense?
A zero balance account is an advantage that none can afford to let pass. Here’s why:
- Earn High-Interest Income:
A zero balance account not only hedges against AMB charges but also guarantees a high-interest income. Take, for example, Kotak 811 account, which allows you to earn up to 6% interest yearly. Even deposits exceeding 5 Crores can earn 5.5% interest annually. However, the interest rates are bank-specific. It’s wise to compare the interest rates offered by different banks to get the best deal.
- Greater Flexibility:
A zero balance account is a simple savings account that offers all the benefits of a regular savings account without any transactional charges. It provides various banking services, including bill payments, money transfers, and ATM withdrawals. Customers can access them via a user-friendly app, secured by two-factor authentication. Eligible customers can also enjoy lifetime free credit cards.
- Simply Convenient:
A zero balance account can simplify banking if you choose the right one. The account is easy to open and eliminates the need to visit the bank as it can be opened online. Simply provide the required information and upload the necessary documents on the bank’s website, set up the account and enter the PIN to activate it. With banks like Kotak Mahindra, customer verification can even be performed via Video KYC and a free debit card can be delivered to your doorstep.
We all have reoccurring transactions to make every month. Think utility bills, loan EMIs, insurance premiums, subscriptions, and donations – the list goes on and on. Keeping track of these payments is a hassle. You even run the risk of missing a payment. How about setting up an e-mandate? Your payments will be collected automatically by the authorized party at regular intervals. Guess what? The e-mandate facility is available with virtually all zero balance accounts.
You can use the zero balance account debit card to shop. When you do that, expect decent cashback and rewards. From e-commerce stores and food ordering platforms to offline vendors, debit cards have you covered.