A current account is the recommended bank account type for businesses which deal with high-volume transactions on a regular basis. A zero balance current account can be beneficial for most account operators as it has no requirement to maintain an Average Monthly Balance (AMB). Hence, withdrawals and deposits are done with more ease.
Here are the features, benefits and how to open a zero balance current account. Read on!
A zero balance current account is ideal for all kinds of businesses and individuals as it requires no Monthly Average Balance, which increases its liquidity. A current account provides no interest on the deposit amount, and it is most ideal for businesses and companies that deal with large value transactions throughout the day.
A zero balance current account enables businessmen to carry out financial transactions smoothly, which leads to a significant increase in a company’s productivity.
A zero balance current account has its unique features and benefits, which makes it an essential tool for business owners or even professional individuals. Given below are the benefits and features of a zero balance account:
The monthly average balance or minimum average balance is the number obtained by dividing the sum of the day-end closing balance in an account by the number of days in that month. Unlike any regular savings account, zero balance current accounts have no monthly average balance. A zero balance account is preferred by businesses as it provides all the same facilities as that of a regular current account.
Any professional individual or other eligible entities can open a zero balance current account with a commercial or non-commercial bank. Here are the steps you should follow to open a zero balance current account:
Step 1: Visit the official website of your preferred bank
Step 2: Open the new account opening form.
Step 3: Fill out the details as required in the ‘Personal details’ and ‘Account details’ sections and click on ‘Submit’.
Step 4: Download or take a printout of the completed form.
Step 5: Go to the nearest branch of the chosen bank and submit the form along with requisite KYC documents.
One can also open a zero balance current account offline by visiting the bank branch along with the required documents.
The following entities can open a zero balance current account with a bank primarily for business transaction purposes:
To open a zero balance current account, the entity has to submit the following documents to the bank:
Here are a few things you should keep in mind before opening a zero balance current account:
The benefits and attributes of a zero balance current account make it ideal for all businesses and companies who wish to engage in hassle-free transactions. However, one should be mindful of the features offered by a zero balance current account before opting for one.
Ans: MSMEs benefit from the feature of liquidity of a zero balance current account. They can use the fund for business purposes and expansions without worrying about keeping a minimum balance in their accounts.
Ans: No, it is not mandatory for MSMEs to provide a GST number while opening a zero balance current account.
Ans: Here are the different types of current accounts banks offer:
Standard Current Account
Premium Current Account
Packaged Current Account
Single Column Cash Book
Foreign Currency Account
Ans: Given below is a list of some of the top banks you can opt for opening a zero balance current account:
Bank of Baroda
Ans: Yes, you can, but your bank will automatically charge your zero balance account as a regular savings account after you exceed the maximum withdrawal limit set by your respective bank. Additionally, you will also have to maintain an average monthly balance.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
What is Issuer Identification Number (IIN)- Working and ImportanceWhat is an Issuer Identification Number (IIN)? Banks and financial institutions assign a distinc... Read More »
What is a Vostro Account – Meaning, Working and DifferenceWhat is a Vostro Account? A Vostro account is a bank account held by a domestic bank on behalf o... Read More »
What is a Solvency Certificate? – Format, Documents Required & How to Apply Online?What is a Solvency Certificate? A solvency certificate is a legal document furnishing the detail... Read More »
What is Merchant Banking – Services, Features, Functions and ExampleWhat is Merchant Banking? Merchant banking is a set of select banking and financial services off... Read More »
Automated Clearing House: Objectives, Types and ProcessAutomated Clearing House is an electronic fund transfer network that manages automatic and direct... Read More »
What is Electronic Clearing Service (ECS) in Banking and How does it Work?What is Electronic Clearing Service (ECS)? Electronic Clearing Service (ECS) is a method of elec... Read More »
What are Credit Card Validators and How to Use them?What is a Credit Card Validator? A credit card validator is a tool that checks the validity of a... Read More »
What are Prepaid Expenses? – Definition, Examples, and Journal EntryPrepaid expenses represent payments made in advance for products or services expected to be incurre... Read More »