For many people who don’t have a high or steady income, opening a savings account can be overwhelming. Since a savings account requires you to maintain a stipulated minimum balance, people who earn below a certain limit are hesitant about opening bank accounts and have to resort to handling their money in the form of loose cash. Unfortunately, this also means that they miss out on the convenience and safety of having a savings account.
To make savings accounts more accessible, the Reserve Bank of India (RBI) introduced a special type of savings account called a Basic Savings Bank Deposit Account or BSBDA. As per the RBI’s motto, “a BSBD should be considered a normal banking service available to all.”
Let us now learn more about a BSBD account, what it offers, who can open it, and how you can open one of your own.
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What is a BSBD Account?
Designed by the RBI, BSBD accounts are a special category of savings accounts that offer certain facilities to the holders, free of charge and without any requirement of minimum balance.
It is also called a zero-balance account or a no-frills savings account.
Services Offered by BSBD Accounts
Today, a BSBD account offers the following services to customers:
- An ATM Card or ATM-cum-Debit Card is linked to your BSBD account.
- Cash deposit services at bank branches and via ATMs are free.
- Cheque deposit and withdrawal facilities are also available.
- There is no upper limit on the number and value of deposits that can be made in a month.
- Since a BSBD account is a savings account, it is an interest-bearing account. Banks offer the same interest rate on BSBD accounts as they do on regular savings accounts.
- Depending on your bank, you can also avail of add-on facilities like demand drafts and electronic money transfers at no extra cost.
Terms and Conditions of BSBD Accounts
Now, let us look at some other conditions stipulated for BSBD accounts:
- BSBD accounts have a maximum account balance. This means that at any given time, your BSBD account balance cannot exceed the maximum balance amount. Currently, the RBI has set this limit to Rs. 50,000.
- The total amount deposited in a BSBD account should not exceed Rs. 1 lakh in a year.
- The total value of cash withdrawals and transfers must not exceed Rs. 10,000 in a month.
- The RBI has mandated that banks cannot charge the account holders a penalty in case their account is non-operative.
- You can make at least four monthly withdrawals, including ATM withdrawals. Moreover, you can also make free balance inquiries at the ATM.
How to Open A BSBD Account?
Any Indian citizen above the age of 18 can open a BSBD account online or by visiting a bank.
There is no requirement for any initial deposit for opening a BSBD account. However, you need to meet the following conditions:
- You cannot have a regular savings account and a BSBD account in the same bank. However, you can request your bank to convert your regular savings account to a BSBD account.
- You should not have completed KYC with a bank prior to opening a BSBD account. This means that you should not be previously registered with the bank as per their KYC norms.
If you are eligible, you can open your account by filling out a form and submitting the following documents:
- Your latest photograph
- Identity proof
- Address proof
Opening a BSBDA is an excellent banking facility for those who cannot always meet minimum balance requirements and do not need to make recurring debits or credits in their account. Most top banks like IndusInd Bank offer this convenient facility.
So, if you meet the above-mentioned criteria and want to open a savings account without worrying about maintaining a minimum balance, open your own BSBD or zero-balance account with IndusInd Bank today!