Zero Balance Savings Account: Features and Benefits Explained
July 01, 2025

Savings accounts can be broadly categorised into two categories – accounts that come with minimum monthly balance maintenance requirements and accounts that come with zero monthly balance maintenance requirements. In this blog, we have tried to simplify the concept of a savings account with zero balance requirement, its features, and how it has revolutionised personal banking for urban and semi-urban Indians.
What is a Zero Balance Savings Account?
A zero balance savings account is a type of savings account where you don’t have to maintain a minimum balance. These accounts are designed to cater to the financially underserved sections of society, ensuring that everyone can access basic banking services without financial stress.
Zero balance accounts are often offered under government schemes like the Pradhan Mantri Jan Dhan Yojana (PMJDY) and by various private and public sector banks as part of their inclusive banking initiatives.
Facts: Did you know that nearly 80% of Indian adults have access to a formal banking system, yet a significant portion still hesitates to open a savings account due to the fear of maintaining a monthly balance? According to the Reserve Bank of India, the introduction of zero balance savings accounts has been a game-changer in driving financial inclusion, especially among low-income groups and first-time account holders.
Key Features of a Zero Balance Savings Account
- No Minimum Balance Requirement: Unlike traditional savings accounts, zero balance accounts do not penalize you for not maintaining a specific balance.
- Basic Banking Services: Includes access to a passbook, ATM/debit card, and internet banking.
- Limited Transactions: Some banks may impose a cap on the number of free transactions per month.
- Free Direct Benefit Transfers (DBT): Beneficiaries of government schemes can receive subsidies directly into their accounts.
- Simplified KYC Requirements: Basic documents like Aadhaar and PAN are often sufficient for account opening.
Benefits of a Zero Balance Savings Account
- Financial Inclusion: Promotes banking access for individuals in rural and semi-urban areas.
- Cost-Effective: No penalties or fees related to non-maintenance of balance.
- Convenience: Easy account management with digital banking options.
- Security: Safe storage of money with deposit insurance provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Who Can Open a Zero Balance Savings Account?
Eligibility criteria for opening a zero balance savings account are minimal, making it accessible to:
- Students
- Senior citizens
- Low-income individuals
- First-time account holders
- Beneficiaries of government schemes
Documents Required
To open a zero balance savings account, you typically need:
- Aadhaar card
- PAN card or Form 60 (if PAN is unavailable)
- Passport-sized photograph
- Proof of address (if different from Aadhaar)
Limitations of Zero Balance Savings Accounts
- Transaction Limits: May have restrictions on the number or number of monthly transactions.
- Fewer Perks: Often lacks advanced features like high withdrawal limits or premium debit cards.
- Dormancy Rules: Inactivity over a certain period may lead to account dormancy.
Final Thoughts
A zero balance savings account is an excellent choice for individuals seeking an affordable and hassle-free entry into the banking system. By eliminating the burden of maintaining a minimum balance, these accounts empower millions of Indians to take their first step toward financial independence. However, potential users should carefully review the terms and limitations of such accounts to ensure they meet their specific needs.
If you're just starting out in your savings journey, opening a Savings Account with Ujjivan Small Finance Bank can be a good start. We have a wide variety of Savings Accounts catering to different financial needs - sign up for the one that meets your financial goals. Alternatively, you can browse through Ujjivan SFB product suite - our wide range of financial products are designed to make your financial life better.
FAQs
1. What is the interest rate for zero balance savings accounts?
The interest rate is typically the same as that for regular savings accounts and varies between banks.
2. Can I convert my regular savings account into a zero balance account?
Yes, most banks allow such conversions upon request, subject to terms and conditions.
3. Are there any hidden charges in zero balance savings accounts?
No, but some services like additional cheque books or international debit cards may have fees.
4. Can I open multiple zero balance accounts?
Generally, banks restrict customers to one zero balance account per individual.
5. Is a zero balance account suitable for businesses?
No, these accounts are designed for individuals and not for commercial purposes.
6. Can NRIs open zero balance savings accounts?
Some banks offer special zero balance accounts for NRIs, such as NRO/NRE accounts.
7. Are ATM withdrawals free with zero balance accounts?
Yes, but the number of free withdrawals may be limited per month.
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