3 major benefits of zero balance savings accounts

There are some noteworthy benefits for opening and operating a zero balance savings account. We examine what these are.

You work hard all your life to provide security and every material comfort to your family. Early on in your working life, you realise that to attain security and financial freedom for the future, you must periodically save money and make investments.

The money you save can help you in a range of situations. Your savings corpus can help you when there is an emergency medical procedure that you or a family member needs to undergo. It can pay for your children’s future education. It can help you in setting up a retirement fund for yourself and your partner. It can also help you bolster the savings of your retired parents so that they may live comfortably in their senior years.

For this, the easiest way to park your surplus funds is to deposit them in your savings account. However, instead of using your usual account, you could consider opening a zero balance savings account. The following are three major advantages of this type of account:

1. You do not need to check if the account balance is maintained. The hassle with other savings bank accounts is that you have to constantly maintain the minimum balance as stipulated by the bank. Failing to maintain the account balance invites a penalty. As opposed to this, the zero balance savings account need not be monitored for account balance at all. Since there is no minimum balance stipulation, you need not worry about penalties and fees being levied every quarter.
2. You can use it as an expense account. As mentioned above, most savings bank accounts put you in a spot when your account balance dips below a minimum balance. Hence, opening a zero balance savings account is a good option if you use it as an expense account. You can lock your savings in another savings account, while using the no balance account to pay bills for maintenance, utilities, groceries, food, travel, entertainment, etc. There is no limit on the maximum number of transactions using this account. With this step, you create an expense account that is separate from the account that stores your valuable savings.
3. You get access to all banking services. As the holder of a zero balance savings account, you get a debit card and pass book from the bank. You also get access to Internet banking, email or paper bank statements and SMS and/or email alerts every time you make a transaction. Also, the bank pays interest on the residual funds in the account.