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Zero Balance Account vs Regular Savings Account

Using a savings bank account is easy – you go to the ATM, withdraw money, and pay your bills and other necessities through the account. However, you need to maintain a minimum average balance in your account. On the other hand, you don’t need to maintain any minimum balance in a zero balance savings account.

Regular Savings Vs Zero Balance Account

A primary savings account requires you to maintain a minimum balance. You slowly lose your hard-earned money through these minor charges that are levied during an account open. This quickly becomes disheartening as you realise you are being charged for not having a minimum balance, thus putting you in a cash crunch next time. However, with the advent of technology and the increasing user base of mobile and digital users, India is transitioning into a cashless economy.

A basic savings account also doesn’t let you access to internet banking facility, in many cases. This paradigm changes entirely with the introduction of a zero-balance account.

What Is A Zero Balance Account?

A zero-balance account is designed to encourage users to save cash without feeling burdens by limits or restrictions imposed on them. Zero balance accounts are created for the everyday user as well as those who don’t use their accounts too often. It doesn’t take much to open up a zero-balance savings account in India. Banks like Kotak Mahindra Bank, SBI and ICICI lets users open zero balance accounts at no extra cost.

By not being forced to adhere to a minimum balance, account holders can safely withdraw any additional money during times of cash crunches.

Benefits of A Zero Balance Account

Let’s take a look at the different features of a zero-balance account and its various benefits-

  1. High-Interest Rates – You’re not going to compromise on your interest rates in zero balance accounts. Account types like the Kotak 811 gives users an interest rate of up to 6% p.a. for amounts saved in the account and up to 5.5% p.a. for balances of 5 crores and above.
  1. Easy to Open – You don’t have to visit the bank branch when you decide to open a zero-balance account. By just visiting the bank’s official website and keying in a few of your essential details including PAN Card and Aadhar, your account is set up! After that, you set up a PIN and start using your account instantly. You don’t have to worry about applying for a chequebook or debit card either since a virtual debit card is integrated with the mobile app.
  2. Non-KYC Balance Up to Rs 1 Lac – Zero balance accounts doesn’t just come with zero balance. They let you deposit and hold a certain amount of money, especially for new account holders. Some zero balance accounts like the Kotak 811 savings account to let you keep up to balances of up to Rs 1 lac.

This is taking into consideration the fact that it’s a partial KYC-account and not a full-fledged one. If you want to keep more money than Rs 1 lac, you can visit the branch and get your account converted to the Kotak KYC zero balance account or the Kotak 811 Edge. This will let you avail chequebook facility plus you will get a physical debit card delivered straight to your doorstep. Having a full KYC zero balance accounts makes it fully operational for both digital and traditional use.

  1. Zero Transaction Charges – One of the many perks of having a zero-balance account is zero transaction charges. If you want to transfer money or withdraw some cash, you don’t have to worry about any deductions or transaction charges. Apps like the Kotak 811 let you send money to your friends and loved ones with a few taps of buttons. The Kotak 811 doesn’t use your ATM PIN when making online transactions. Instead, it uses its unique authentication password called the mPIN for verifying and authenticating payments and transactions.
  2. Shopping and Entertainment – Shopping and entertainment are the two areas of life which nobody can compromise. A virtual debit card lets you pay for your favourite products at sales terminals. If you’re shopping online from merchants like Amazon, Flipkart, and international sellers, having a zero-balance account becomes very beneficial. The Kotak 811 lets you pay for products from Google Play Store, Amazon, and works with various international merchants. Since you can buy online, you don’t have to travel all the way to physical stores to get what you want. Additionally, it saves you time, money, and lets you compare and choose products carefully. The Kotak 811 app also allows you buy discounted movie tickets from PVR Cinemas online.
  3. Scan and Pay– No cash. No problem. With a zero-balance account comes many features and one of them is the Scan and Pay. The Kotak 811 app integrates this, and all you have to do to use it is scan the QR code at the POS terminal when shopping.
  4. Free IMPS and NEFT Transfer – IMPS and NEFT transfers are popular. We did mention there are no transaction charges involved in the withdrawal and depositing of money in a zero-balance account. But the real game-changer of a zero-balance account is that IMPS and NEFT transfers are also absolutely free of cost!
  5. Activ Money Facility – Sometimes you have additional money lying in your account or sitting idle. Wouldn’t it be great to make some investments or get a passive income stream with it? The problem with most savings accounts is that, once you open any investment schemes like Term Deposits, you cannot withdraw before a set period.

The Kotak 811 apart stands apart from the rest in this segment. It allows your money to automatically transfer into your Term Deposit account when it’s sitting idle. In the event, your total balance dips low, the money from your Term Deposit gets transferred back to your account. This way, you keep investing bit by bit and save up in the long run, without compromising financially.

Why Zero Balance?

Switching to a zero-balance account is a definite yes for most account holders. Some of the many reasons you’d prefer switching to a zero-balance account are the fact that you don’t lose money by keeping a minimum or zero balance in your account. Besides this, since it doesn’t take a lot of time to open one, it’s rather convenient.

Opening a zero-balance account for the new user means availing many benefits such as getting special cashback offers, discounts on movies, and availing shopping coupons at POS transactions through the Kotak 811 app. And did we mention how easy it is to operate your account? All you need is to generate a mPIN which is used for most of your digital transactions. The eligibility for opening a zero-balance account at Kotak Mahindra Bank is that you must be 18 years old, an Indian resident, and have your Aadhar Card and PAN details. As long as you are an Indian resident, over 18 years old and have an Aadhar Card and a PAN card, you can open a zero-balance account under the Pradhan Jan Mantri Yojana Scheme in other banks

The Zero Balance Revolution in The Top 5 Cities in India

Zero balance accounts are changing the way citizens view finances and are positively impacting the society as a whole. Let’s take a look at how India is changing with the zero-balance revolution:


Nearly 40% of State Bank of India accounts across India are zero balance accounts.  The State Bank of Hyderabad and other branches gives customers the option to convert existing savings bank accounts to a BSBD (Basic Savings Bank Deposit) account or zero balance accounts at no extra cost. These zero balance accounts are targeted towards making banking accessible to the financially weaker sections of society.


Bangalore is the Silicon Valley of India and an IT hub. Almost every business professional and student is a smartphone user. Blockchain technology is disrupting the fintech segment and leading to innovations.

AI and Machine Learning are dominating the finance sectors and transforming traditional banking services into a digital banking revolution. Banking players like Karnataka Bank Bengaluru and HDFC Bank let account holders file tax returns completely online and enable biometric authentication on transactions. These banks have zero balance account users too with mobile banking facility integrated with them.


Over 85,000 bank branches are in Chennai, and the South Indian economy are turning more and more digital by the months. Equitas in Chennai is one of the leading small finance banks in this region and lets users carry out NEFT and RTGS transactions without adding CPIN# as beneficiary. According to a Hindu Business Line Report, Equitas closed multiple transactions in the previous financial year which comprised of a mix of private equity, merger and acquisitions, structured finance, and capital market transactions.


Zero balance account holders are growing in Pune, and digital banking is becoming mainstream. Players like Bank of Maharashtra in Pune, Vishveshwar Sahakari Bank Ltd. Pune, Jana Bank, and Maharashtra State Co-operative Bank in Pune are introducing mobile banking, fixed deposit, and various financial schemes in affordable and accessible ways to users. Accounts under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) are available in leading and small finance banks, thus promoting the zero balance philosophy in action. Access to pension and insurance products are included with these accounts along with interest on deposits and an accidental insurance cover of Rs 1 lac.


Online banking has enabled customer satisfaction across Mumbai, and fintech companies are introducing innovative financial services. Minimum balance and zero balance accounts are becoming the norm in the city, and cashless transactions are synonymous with the cosmopolitan population. SBI offers customers a basic RuPay ATM-cum-Debit card at no additional cost to users on zero balance account openings. There are no annual maintenance charges involved, and no charges are levied on inactivation or closure of these accounts. The MSC Bank Mumbai gives complimentary accidental insurance of up to Rs 1 lac on Rupay debit cards and the Sikhar Mobile Banking app allows instant funds transfers and generates mini statements within seconds. Missed call alert services are integrated with these banks in Mumbai and across various financial players.

ICICI Bank branches in Mumbai provide a passbook facility with zero balance accounts, and the daily spending/withdrawal limits are restricted to Rs 10,000 a day. HDFC Bank provides its customers with options such as a safe deposit locker facility,  and Super Saver schemes to those who hold zero balance accounts or Basic Savings Bank Deposit (BSBD) accounts.

All across India

Key innovations in the financial sectors are Digital Analytics, virtual banking, cryptocurrency trading, and blockchain technology. Digital banks are providing paperless, branchless, and signature-less transactions which are based on Aadhar-based verifications.

Security concerns are being addressed with the use of biometric authentication, and AI-based interfaces provide quick and personalised financial services to account holders based on their different requirements.

Robotics technology is automating various banking processes, thus freeing up more time for banking employees to focus on creating innovative financial products and serving customers better. Blockchain technology is preventing fraudulent cases, and banks are using Google Glass Technology to locate nearby bank branches, ATMs, and check account balances.  Leading banks like ICICI and SBI offer a Basic Savings Bank Deposit (BSBD) account which lets users keep zero balance without being inflicted by additional charges. These banks won’t do anything to your account even if it has Rs 0 in its balance.


Modern banking websites use HTTPs protocol and Blockchain technology for maximum safety and security, thus ensuring your details stay private when conducting transactions. Payment apps like the UPI and PayTM facilitate cashless transactions by letting users make peer-to-peer transactions.

Once you open a zero-balance account at Kotak Mahindra Bank, you get to start using it in a matter of minutes from anywhere you want, at any moment of time. A zero-balance account at Kotak Mahindra bank is designed for a single user which means no more worrying about joint-account downsides or leaking info to third-parties. To learn more about opening a zero-balance account or to open one instantly, visit the Kotak Mahindra Bank official website or download the Kotak 811 app from the Google Play Store


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