Maintaining the requisite balance in a bank savings account may not be possible for all at all times. If this is a frequent problem and you are struggling to maintain sufficient funds, then to avoid paying any penalty to banks, here’s a better option. You can ask your bank to open a ‘basic savings bank deposit account (BSBDA)’ which by RBI rules does not require a minimum balance to be maintained. If you are already holding a savings account, initially it has to be closed before opening a BSBDA account. One can have a BSBDA account in more than one bank.
Basic savings bank deposit account (BSBDA) accounts suit those who are finding it difficult to maintain monthly average balance (MAB) in the bank’s regular savings account.
One can open BSBDA, a zero-balance savings account, in any bank. In BSBDA there is no such compulsion to maintain any average monthly or quarterly balance.
The interest rate will be the same as that on the regular savings account.
The RBI rules do not put any restriction on the deposit or withdrawals or any transaction limits.
You as an account holder will get the ATM-cum-debit card and the passbook facility.
All regular features including deposit and withdrawal of cash at bank branches as well as ATMs, cheque book facility (payable at par or multi-city) and online funds transfer will be available in the account.
These facilities will be provided without any charges.
As a BSBDA account holder, one may open a fixed deposit or a recurring deposit.
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 restricted to only four.
Such withdrawals will include ATM withdrawals and other modes including RTGS, NEFT, clearing, branch cash withdrawal, online transfer, standing instructions, EMI etc. Still, banks are allowed to either offer free or charge for additional withdrawals.
Importantly, if BSBDA is opened on the basis of simplified KYC, the accounts would be treated as ‘BSBDA- Small Account’. In such a case, the aggregate of all credits in a financial year cannot exceed Rs 1 lakh and the aggregate of all withdrawals and transfers in a month cannot exceed Rs 10,000. Also, the balance at any point of time cannot exceed Rs 50,000. Small accounts are valid for a period of 12 months initially which may be extended by another 12 months if the account holder provides proof of having applied for an officially valid document.