Zero Balance Account: Here are some dos and don'ts if you have Basic Savings Bank Deposit (BSBD) Account

Basic Savings Bank Deposit (BSBD) Account: If a customer has a BSBD account then the best part is that he/she doesn't have to worry about minimum balance in their account. BSBD account is best referred to as a zero-balance account. Some of us think that 'Basic Savings Bank Deposit Account' is only for a poor or weaker section of the society - it is wrong as the RBI says that BSBD account should be considered as a normal banking service available to all customers, through branches. However, even now many of us are confused about the functioning of the BSBD account especially when it comes to financial transactions. Unlike a savings account, there are various limitations in BSBD account.

RBI on its website has given detailed guidelines in regards to BSBD account. Let’s find out what it happens when you have a BSBD account and also have another bank account?

If you already have a BSBD account and also other savings account in the same bank then the holders of 'Basic Savings Bank Deposit Account' will not be eligible for opening any other savings account in that bank. If a customer has any other existing savings account in that bank, he/she will be required to close it within 30 days from the date of opening a 'Basic Savings Bank Deposit Account'. 

One can also have Term/Fixed Deposit, Recurring Deposit etc, accounts in the bank where one holds 'Basic Savings Bank Deposit Account'.

BSBDA customer cannot have any other savings bank account in the same bank. If 'Basic Savings Bank Deposit Account’ is opened on the basis of simplified KYC norms, the account would additionally be treated as a 'Small Account' and would be subject to conditions stipulated for KYC norms / AML standards / Combating of Financing of Terrorism (CFT) / Obligation of banks.

Here are some of the points that an account holder needs to keep in mind:

1. The total credits in  BSBDA accounts should not exceed one lakh rupees in a year. 

2. Maximum balance in the account should not exceed Rs 50000 (fifty thousand rupees) at any time.

3. The total of debits by way of cash withdrawals and transfers should not exceed Rs 10000 (ten thousand rupees) in a month.

4. Foreign remittances cannot be credited to Small Accounts without completing normal KYC formalities.

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Free services:
The bank offers free services including deposit and withdrawal of cash, receipt/credit of money through electronic payment channels or by means of deposit/collection of cheques at bank branches as well as ATMs. 

Age/ Income criteria:
For opening a BSBDA account the bank is advised not to impose restrictions like age and income criteria of the individual for opening BSBDA.

Savings account be converted in BSBD
If you want to transfer your Saving bank account into BSBD account then a savings account holder should give their consent in writing and they should be informed of the features and extent of services available in BSBDAs.