Maintaining the required balance in a bank savings account may not be possible for everyone at all times. If this is a frequent problem and you find it difficult to maintain sufficient funds, then to avoid paying penalties to banks, here is a better option. You can ask your bank to open a “Basic Savings Bank Deposit Account (BSBDA)” which according to RBI rules does not require a minimum balance to be maintained. If you already have a savings account, it must first be closed before opening a BSBDA account. One can have a BSBDA account in more than one bank.
Basic Savings Bank Deposit Accounts (BSBDA) are suitable for those who find it difficult to maintain the monthly average balance (MAB) of the bank’s regular savings account.
One can open BSBDA, a zero balance savings account, at any bank. In BSBDA, there is no such requirement to maintain an average monthly or quarterly balance.
Main characteristics
The interest rate will be the same as the ordinary savings account.
RBI rules do not impose any restrictions on deposits or withdrawals or transaction limits.
As an account holder, you will get the ATM card with debit and passbook facility.
All the usual functionalities, including depositing and withdrawing cash at bank branches as well as ATMs, checkbook function (payable at par or multi-city) and online funds transfer will be available on the account.
These facilities will be provided free of charge.
As a BSBDA account holder, one can open a fixed deposit or a recurring deposit.
Restrictions
However, being a zero balance account, there are certain restrictions in BSBDA accounts. One can make unlimited deposits but the maximum withdrawals in a month are limited to only four.
These withdrawals will include ATM withdrawals and other modes including RTGS, NEFT, clearing, in-branch cash pickup, online transfer, standing instructions, EMI, etc. Nevertheless, banks are authorized to offer free or paid additional withdrawals.
It is important to note that if BSBDA is opened on a simplified KYC basis, accounts will be treated as “BSBDA – Small Account”. In such a case, the total of all credits during a financial year cannot exceed Rs 1 lakh and the total of all withdrawals and transfers during a month cannot exceed Rs 10,000. the balance at any time cannot exceed Rs 50,000. Small accounts are valid for an initial period of 12 months which can be extended for an additional 12 months if the account holder provides proof that he has applied for an officially valid document.
