SBI, HDFC, among other banks start zero balance banks

Zero-balance accounts and what they are about.

Minimum Balance

Every time a person made a bank account, they had to deposit a minimum amount of money, and maintain this amount of money in the account. Failing to do so would result in a penalty, like the bank account being closed. In 2012, SBI revoked this measure of ‘minimum balance’. Earlier, SBI required applicants to have a minimum balance of ₹1000 in their accounts. They also had accounts which could have a minimum balance of as low as ₹50. In 2012, they revoked this policy to increase their applicant base.

Other private sector banks like HDFC and ICICI continue to have this policy. The minimum balance for a savings account for a private sector bank is up to ₹10,000.

Zero balance accounts

What is a zero-balance account? It’s a checking or savings account in which the balance is zero and there is no penalty for not maintaining a minimum balance. This account is usually used only for payments, with constant cash flow. It’s never used to maintain a running balance.

Source. A typical Indian bank


KYC stands for ‘Know Your Customer’. It’s a set of documents that basically confirms your identity. For example, the following are considered as acceptable as proof of identity:


1.      Passport

2.      Voter’s ID

3.      Driving licence

4.      Aadhar Card

5.      NREGA Card

6.      PAN Card

The KYC act as your identity and prove your identity for reassurance.


Banks levy various charges if an applicant can’t maintain a monthly average balance, like issuing a debit card or closing the account. A zero-balance account can now help you surpass these penalties. Even though its meant for poor people, anyone with valid KYC documents can open a zero-balance account.

The rate of interest is similar to the regular savings accounts. No charges are applicable for creating and maintaining the account. The banks issue a free Basic RuPayATM-cum-debit card for it. There are no charges if one decides to close the account.

However, HDFC charges ₹500 if the account is closed after 15 days and before a year. After a year, there are no cancellation charges.

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