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Zero Balance Current Account – All You Need to Know

Last Updated on August 27, 2021

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Many of you might have heard about various types of accounts in banks. They help organizations, business professions or an individual to manage the day to day withdrawals or transactions. But, businessmen have to face a lot of trouble maintaining the minimum balance. And when there is a problem, there is a solution. That is why the zero-balance current account was introduced.

Want to know about this marvelous innovation? Let’s get started.

Table of Content

  1. What is a zero balance current account?
  2. Features
  3. Procedure for opening zero balance current account
  4. Eligibility criteria
  5. Document Required
  6. Zero balance current account offered by different banks
  7. Conclusion
  8. Frequently Asked Questions (FAQs)

What is a Zero Balance Current Account?

You may know what a current account is. In case you don’t, it is a bank account that is used by business professionals, entrepreneurs, firms, or organizations that perform a large number of daily monetary transactions. It is so because it offers a couple of advantages that other accounts does not offer.

But one thing is common about them. All types of bank accounts require you to maintain a minimum average balance in your account. It may be irritating sometimes, right? To solve this problem, the concept of a zero balance current account was introduced. And this innovation spread like fire.

That is why various banks in India, like ICICI Bank, Axis Bank, SBI, etc., offer a current account with no requirement of maintaining a minimum average balance.

Features

  • It can be operated by an Individual, NGOs, Trust, Public or Private companies, etc. 
  • There is no requirement for maintaining minimum average balance.
  • Although there is no requirement of minimum balance, it doesn’t offer interest as well.
  • There is a facility for unlimited withdrawal from the home branch. But there is a limit on the number of withdrawals from a non-home branch.
  • It offers various direct payment facilities like NEFT, Demand draft, Pay orders, RTGS, etc.

How to open a Zero Balance Current Account?

Opening a zero-balance account is very easy and simple. After all, what will be the point of making the process complex? It will discourage people to open a bank account for their business. And you know that business is the backbone of the economy.

Nowadays, every bank offers a current account. So, you can visit the bank of your choice. Afterward, you have to fill out the account opening form with all details required. Lastly, submit the filled form along with the required KYC documents. And that’s the end of it.

How to open a Current Account online with zero balance?

Technology is becoming pretty advanced, isn’t it? Nowadays, it is also possible to open a bank account while sitting at your home. You can open it online as well, by following these steps.

  • Firstly, open the official website of the bank. For example, if you select Axis Bank, go to the website https://www.axisbank.com/business-banking/current-account/digital-current-account/offers.
  • Then, select the option for the account opening form and download it.
  • After downloading the form, you have to fill in the necessary details.
  • Then download the form and print it.
  • Finally, visit your nearest bank branch with the filled printed form and all the required KYC documents and submit them.

That’s it! Your account is good to go.

Eligibility Criteria for Zero Balance Current Account

Banks set eligibility criteria to open a zero balance current account. But, don’t worry about satisfying it. It’s no rocket science. The basic criteria are that you should belong to any of the following categories:

  • An individual resident.
  • Sole trader or proprietor.
  • A private or public limited company.
  • A trusted and partnership firm.
  • NGO, Trust, or Societies.

See, we told you, right? All of you can satisfy the basic criteria without breaking a sweat.

Required Documents

The documents required may vary for different banks depending upon their internal policies.

  • A passport size photograph
  • For proof of identity, you can submit any one of the following:
    1. Aadhar card
    2. Passport
    3. Driving license
    4. Pan card
    5. Voter id
  • For address proof, any of these documents is sufficient:
    1. Water, electricity, telephone bills
    2. Ration card
    3. Rent agreement
    4. Driving license
    5. Bank statement

Zero Balance Current Account offered by various banks

The different banks offer different schemes for a current account without the requirement of a minimum balance.

Nowadays, the startup culture is thriving in our country. Launching one has become a fad among the Millenials. And why not? They help the entrepreneurs to gain practical knowledge and experience, besides motivating them to quit the 9 to 5 routine.

This is what most banks keep in mind. That is why they have developed customised features exclusively for startups. For example, ICICI Bank’s Shubbharambh Current account and New Startup Current account offer financial benefits to potential start-ups, businesses, and firms. Kotak Mahindra bank offers various schemes as per your business needs and multiple benefits to customers.

Anyways, here is a list of banks offering zero balance current accounts with innovative names:

Zero Balance Current Account
Bank NameZero balance Current Account
Axis Bank Local current account
Indusland Bank Indus Freedom Current account  
ICICI Bank Shubhaarambh and New startup current account  
Bank of Baroda Startup current account  
HDFC Bank
Government or institutional current account  

Want to know about them in detail? Well, here you go.

Axis Bank Current Account

The following table shows the advantages and features of Axis Bank Local’s current account.  

FeaturesCharges
Average Monthly Balance (MAB)No minimum amount requirement, zero.
Limit for cash depositNo charges up to 3 lakh rupees per month.
Home Branch withdrawal limitNo charges up to 75 transactions.
Non-Home Branch withdrawal limit
Charges for NEFTFor transactions above 2 lakhs, the charge is 25 rupees.
Charges for RTGSFor transactions of 5 lakhs and above, the charge is 50 rupees.
Annual Charges1999 rupees + service tax (Per month 75 free transactions)

IndusInd Bank Freedom Current Account

You may wonder about the hidden meaning behind its name. Sounds exciting, isn’t it? Well, it lives up to its name. That is why it doesn’t charge even a single penny on the transaction.

What’s more, it even sends physical and digital bank statements. It helps in managing the expenses and the cash flows of the business. Thus, becoming your all-time financial manager.

Due to its unique features, it is best suited for small and medium businesses with no requirement of minimum balance.

FeaturesCharges
Average Monthly Balance (MAB)No minimum amount requirement, zero
Limit for cash depositNo charge up to 4 lakh rupees per month
Home Branch withdrawal limitFree of charge
Non-Home Branch withdrawal limitFree of charge
Charges for NEFT, RTGS, IMPSFree of charge
Account Statement per MonthPhysical statement per month by post and free email statement
Cheque LeavesCheque book issuance is free of charge

ICICI Bank Current Account

The majority of the banks offer a single type of current account. But ICICI Bank overshadows them all, by developing an additional type. They are as follows:

New Startup Current Account: It is ideal for small and medium start-ups to manage their finances and transactions through other mediums.

FeaturesCharges
Average Monthly Balance (MAB)Initial six months, no minimum balance required.
Limit for cash depositFor maintained monthly balance, free limit up to twelve times.
Home Branch withdrawal limitUnlimited and free.
Non-Home Branch withdrawal limitFree of charge up to 50,000 rupees per day.
Account Monthly Statement25 rupees per month for a physical statement.
Cheque leavesFree up to 100 cheque leaves per month.
Charges for account closing 1000 rupees, if the account is closed after 14 days.

The Shubhaarambh Current account: As the name suggests, it is a new beginning in the banking industry. It offers more benefits to its customers, as compared to others. It is also suitable for Proprietorship start-ups.

FeaturesCharges
Average Monthly Balance (MAB)Initial six months, no minimum balance required.
Limit for cash depositFor maintained monthly balance, free limit up to twelve times.
Home Branch withdrawal limitUnlimited, free.
Non-Home Branch withdrawal limit50,000 rupees free of charge per day.
Account Monthly StatementPer month twenty-five rupees for physical statement.
Cheque leavesFree, up to 100 cheque leaves per month.
Charges for account closing 1000 rupees, if the account is closed after 14 days.

Bank of Baroda Startup Current Account

The above banks offer zero balance facilities for six months. But Bank of Baroda takes it to the next level. It does not require maintaining a minimum balance for up to 2 years. So, you are hassle-free during this time. They provide account statements for free twice a month. But they don’t stop here. Besides these facilities, there is no limit for cash withdrawal as well.

FeaturesCharges
Average Monthly Balance (MAB)Initial two years, no minimum balance required.
Limit for cash deposit50,000 rupees per day limit
Home Branch withdrawal limit Free of charge
Non-Home Branch withdrawal limitFree limit up to 25,000 rupees per day
Charges for NEFT, RTGS, IMPSFree of charge for two years
Account Statement per MonthFree of charge, provided two times a month
Cheque LeavesFree of charge for two years, per month 200 cheque leaves provided
Charges for account closing (after 14 days)500 rupees for an individual account, 800 rupees for a non-individual account

HDFC Bank Current Account

HDFC Bank is considered the best bank among all. It is due to the exclusive features provided by them. This case is no different.

It is a Government or Institutional account, which offers facilities like free account statements, fund transfers, and more without maintaining any minimum balance of up to two years.

FeaturesCharges
Average Monthly Balance (MAB)Initial two years, no minimum balance required.
Limit for cash deposit50 lakhs rupees per month free of charge.
Home Branch withdrawal limitFree of charge.
Non-Home Branch withdrawal limitFree, limit up to 1 lakh rupees per day.
Charges for NEFT, RTGSFree of charge.
Account Statement per MonthFree of charge.
Cheque LeavesFree of charge, per month 500 cheque leaves provided.
Charges for account closing (after 15 days to 6 months)500 rupees.

Conclusion

Considering the present scenario, bank accounts have become a necessity among businesses. But there are restrictions related to transactions, minimum balance, and withdrawals. To overcome them, startups and businesses use zero-balance current accounts. It will not only help in carrying out a high number of transactions but running businesses smoothly as well. In India, many banks provide the zero balance current account with many customized benefits to the businesses.

So, it’s essential that you should choose the best-suited account, considering your requirements. If you are struggling to find one, this article can be your guide.

Frequently Asked Questions

Q1. Is GST Number mandatory for opening a zero balance current account?

Ans. No, a GST number is not mandatory for opening a zero balance current account.

Q2. For opening a bank account, is a PAN card compulsory?

Ans. The Reserve Bank of India (RBI) has made the Aadhar card and PAN card compulsory documents for opening a bank account.

Q3. Which banks provide online services for opening a zero balance current account?

Ans. Banks like Indusland, Axis, Bank of Baroda, ICICI, etc., provide online services to open a zero balance current account. 

Q.4 Is there a facility of ATM in the current account?

Ans. Yes, there is a facility of ATM for current accounts, individual or joint accounts.

Q.5 What documents are required for opening a current account with zero balance?

Ans. Following are the necessary documents required for opening a zero balance current account:

  • Recent passport size colour photograph.
  • Address Proof like bills, rations card, voting card, bank statement, business registration proof, etc.
  • Identity proofs like an Adhar card, PAN card, driving license, business registration certificate, etc. are required.

Q.6. Can I open a zero balance current account in ICICI Bank?

Ans. Yes, you can open a zero balance current account in ICICI Bank easily through an online or offline process. ICICI bank provides two types of current accounts – a New Startup Current Account and a Shubhaarambh Current Account.

Q.7 Which bank is the best for zero balance current account?

Ans.  ICIC Bank is the best for opening a zero-balance current account. It is ideal for SME, startup and freelancer to manage their finances and transactions. Most of the new startups prefer the seamless service of ICICI zero balance current account.