Zero Balance Current Account Opening Online
- Nimisha Panda
- Dec 15
- 9 min read
Introduction
A zero balance current account is an option if you intend to open one for yourself or your company. You won't have to maintain a minimum balance each month or quarter with a zero balance current account, which will ease your financial stress. Zero balance current accounts can assist small business owners in launching their ventures. Zero-balance current accounts, however, do not offer the infrastructure and assistance required for a rapidly expanding company. Zero balance current accounts don't generate any income for banks, hence they only provide a few functions with them. For someone looking to open this account, it is crucial to know everything about it.
Table of Contents
What is a Zero Balance Current Account?
There is no minimum balance that the account holder is required to maintain in a zero balance current account. A zero balance current account gives businesses the freedom to manage their operations without worrying about minimum balance requirements, in contrast to standard current accounts where account holders must maintain a specific amount to avoid fines. With greater flexibility, a zero-balance current account provides all the benefits of a regular current account. This type of account may be useful for startups, small enterprises, independent contractors, and entrepreneurs who want to reduce their banking costs while still maintaining efficient financial activities.
Types of Zero Balance Current Accounts
Depending on the requirements of the individual and business, banks provide a variety of zero balance current account options. The categories of current accounts with zero balances are as follows:
General Current Accounts: Companies, trusts, consultancies, corporations, etc. can open general current accounts, which are regular current accounts. They offer the simplicity of keeping a zero balance and may be appropriate for a range of business or proprietor needs.
Startup Accounts: These accounts are intended for brand-new companies. They can function without worrying about money because they are not required to maintain any account balance. These accounts might have less fees and more straightforward features.
Retail/Wholesale Accounts: These accounts have capabilities like bulk payment processing and are appropriate for retailers or distributors. They can keep this account open to conduct large transactions without having to settle any outstanding balances.
Corporate Accounts: These accounts, which are intended for larger businesses, provide capabilities including advanced cash management at zero balance and multiple account access.
Features of Zero Balance Current Account
There are a number of characteristics that make a zero balance current account appealing. Among the salient characteristics are:
Current account customers do not have to worry about fees for low balances because they are not required to maintain a minimum amount.
For current accounts with no balance, banks provide free UPI payment services, mobile banking, and online banking.
They are perfect for conducting large-scale financial transactions with zero monthly account balances for both people and organisations.
Account customers receive free demand drafts, chequebooks, and business debit cards to help with transactions and payments.
Account users can quickly transfer money using a number of banking techniques, such as NEFT (National Electronic Funds Transfer), RTGS (Real-Time Gross Settlement), and IMPS (Immediate Payment Service).
For current accounts with zero balances, some banks offer an overdraft facility that allows account users to take out more money than they have available up to a predetermined amount.
Benefits of Zero Balance Current Account
For companies and entrepreneurs, a zero balance current account offers several benefits, including the following:
Cash strain may become a problem for micro and small businesses in their early phases of expansion, making it impractical for them to maintain a specific minimum account balance. They can transact without having to worry about maintaining a set amount, thanks to a zero balance current account.
Maintaining permanent balance accounts can be challenging for consultants and freelancers. They may effectively manage their accounts without worrying about keeping a minimal amount when they have a zero-balance account.
By removing the concern of fines for low balances, they could be beneficial to startups and small enterprises with erratic cash flows.
If the balances in traditional current bank accounts fall below a predetermined threshold, fines are imposed. Fines are eliminated by zero balance savings accounts, which lowers bank-related expenses for businesses.
Online banking is made easier by the zero balance current account, which enables a firm to handle funds, review statements and make payments.
For zero balance current accounts, a number of banks provide business-friendly features including bulk payments, invoicing tools, and payment gateway integration, increasing productivity and transforming the account into a complete business banking solution rather than merely a banking tool.
A zero balance current account with a bank will undoubtedly be advantageous because of the increased likelihood of obtaining loans, overdraft facilities, and business credit cards.
Disadvantages of Zero Balance Current Account
A zero-balance current account has drawbacks, even if it can offer simplicity and flexibility. The main drawbacks are listed below:
There is no interest charged on the money put in a current account with no balance.
Free transactions are permitted by many banks up to a certain amount. Any transactions that go beyond that cap could result in fees. These fees can accumulate over time for companies with multiple transactions, raising banking expenses.
Monthly cash withdrawal and deposit limitations are common for current accounts. Businesses may face difficulties if they go beyond their restrictions.
Businesses that need services like large-scale cash withdrawals or cheque deposits may find it inconvenient as zero balance current accounts only offer online and mobile banking.
Zero balance current accounts are often not designed to hold money for long periods of time and do not earn interest on deposits.
Steps to Open Zero Balance Current Account Online
Customers can start a zero balance current account online with most banks by completing the steps listed below:
Step 1: Visit the desired bank's official website.
Step 2: Click "Apply Now" after selecting "Zero Balance Current Account" from the current account selections.
Step 3: Give specifics like the name, address, and nature of the business.
Step 4: Send in scanned copies of all the necessary paperwork, including business records, proof of identification, and proof of address.
Step 5: Some banks use a know-your-customer check or video KYC for authentication. You will receive account details via email or SMS after approval.
Steps to Open Zero Balance Current Account Offline
If you would rather start a current account with no balance offline, follow these steps:
Step 1: Visit the chosen bank's closest branch.
Step 2: Request and complete the zero balance current account opening form.
Step 3: Include the necessary supporting documentation, such as a copy of your identity, proof of address, and business registration paperwork.
Step 4: The bank confirms your information and, if required, may verify it in person.
Step 5: Your account opening kit, which consists of the account form, debit card, and chequebook, will be sent to you upon approval.
Documents Required to Open Zero Balance Current Account
It is crucial to remember that, depending on the bank and account type selected, different paperwork may be needed to start a zero balance current account online. A general list of often- needed documents is provided below:
Proof of Identity (Any one)
Voter ID card
Driving license
Passport
Proof of Address (Any one)
Rent agreement
Utility bills (Electricity, Water, Telephone)
Bank statement
Passport
Driving license
Ration card
Passport Size Photograph
A recent passport-size photograph and the application form
Additional Documents Based on Business Type
Additional paperwork is needed for account opening, depending on the type of business. The specific documents required according to the company entity are listed below:
Sole Proprietors
Proprietorship registration letter
Certification issued by Sales Tax or Service Tax authorities
Partnership Firms
Registered Partnership Deed
Hindu Undivided Family (HUF)
HUF declaration letter signed by the Karta and all coparceners
Private & Public Limited Companies
Certificate of Incorporation issued by the Registrar of Companies
Memorandum and Articles of Association (MOA & AOA)
For Trusts
Registration Certificate
Resolution passed by the Board of Trustees
Best Banks for Zero Balance Current Account
A zero-balance current account typically has restrictions or is only available to specific types of businesses (such as startups and corporations). As a result, the ideal zero-balance current accounts greatly depend on your particular business requirements. Nonetheless, the following is a broad summary of banks that provide current accounts with zero balances:
Axis Bank: Axis Bank's "Delite Current Account" does not mandate an average balance requirement. Additionally, there are no monthly service fees for this account. It works best for businesses, firms, and sole proprietors.
HDFC Bank: An "Institutional Current Account" with zero balance characteristics is available from HDFC Bank. Trusts, associations, societies, clubs, government agencies, and nonprofit organisations may open this account. It provides a number of functions, including bulk payments to suppliers and employee salary payments, demand draft or bulk cheque printing, quicker intercity cheque collections, Forex services and more.
ICICI Bank: The bank offers a range of zero balance current accounts, with options such as Business 360° Banking, Business Banking Elite, Business Banking Silver, Business Banking Gold, Business Banking Platinum, iStartup Tech, Repriced Current Account (REPCA), GEM Current Account, and Collection Current Account. Businesses, startups, government suppliers, vendors, and contractors can all benefit from these accounts. They also provide further advantages like free cash deposits and electronic transfers.
IndusInd Bank: The "Merchant Plus Basic Account" from IndusInd Bank has a zero balance feature. Both digital and paperless methods are available for opening this account. At the base location, it offers free cash deposits up to Rs. 3 lakh.
Punjab National Bank (PNB): PNB provides a zero balance current account called the PNB Expert Current account. Chartered accountants, business secretaries, physicians and other medical professionals, architects, solicitors, cost accountants, valuers, interior designers and fashion designers can all benefit from it. It provides free daily cash deposits and withdrawals up to Rs. 1 lakh. It offers RuPay Select and RuPay Platinum debit cards.
Conclusion
Financial accessibility, cost effectiveness, efficient cash flow management, financial inclusion, and simplified operations can all be greatly enhanced by zero-balance current accounts. The least expensive and zero balance current account can be a wonderful place to start when selecting a business account that will help you run your everyday operations as efficiently as possible.
Frequently Asked Questions
What is a zero balance current account?
You can conduct transactions without having to maintain a Monthly Average Balance when you have a zero balance current account.
Can the minimum balance for the current account be zero?
Yes, a lot of institutions provide current accounts with zero balances and no minimum balance requirements.
What is MAB (Monthly Average Balance)?
The average closing balance of your account on each day of the month is known as the Monthly Average Balance, often known as the Minimum Average Balance. MAB is equal to the sum of the closing balances for each day of the month divided by the total number of days.
Does your business need a zero balance current account?
Both the minimum balance requirement and the penalty for non-maintenance are often quite minor. However, having a fully loaded current account has several long-term advantages.
Can I open a zero balance current account?
It is possible for anyone to start a current account with no balance. Leading banks like ICICI Bank, Yes Bank, and others allow anyone in need of extremely flexible, low-restriction accounts to apply for and activate a zero balance current account.
How can startups open zero balance current account?
Despite its drawbacks, a zero balance current account would be most advantageous for startups. To apply for a current account, the business promoter must provide the business registration documents, PAN card, and proof of address, either online or in person at a bank location.
Can I open a zero balance current account without GST?
Yes, you can start a current account with no balance without a GST number.
Can I open a current account with no income?
On the basis of legitimate business papers, freelancers and entrepreneurs with little initial revenue are able to open a zero balance current account.
Are all current accounts zero balance accounts?
No, the majority of current accounts have a minimum balance requirement; however, several institutions provide zero balance current accounts under particular circumstances.
Can zero-balance current accounts support high transaction volumes for growing businesses?
Yes, a zero-balance current account's capacity to handle large transaction volumes for expanding companies is one of its advantages.
Are there any limitations or fees for zero-balance current accounts?
Limits on the number of free transactions or the total transaction amount within a given time frame may be imposed by certain zero-balance current accounts. If these limits are exceeded, there may be further fees. Even though zero-balance current accounts frequently have lower monthly maintenance costs than standard accounts, there can still be costs for some extra services.
How can businesses ensure they choose the right bank for their zero-balance current account needs?
Seeking suggestions from their business networks, conducting research, comparing features, evaluating fees, and reviewing customer service are some of the greatest ways to make sure the bank is the best fit for their zero-balance current account needs.
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