Basic Saving Bank Account – No minimum balance required (+ more features)

POSTED BY priyanka ON August 3, 2018 COMMENTS (20)

Do you worry about maintaining the minimum balance in your bank account? If that’s the case, then you will be happy to know that now RBI has mandated all the banks to offer something called as Basic Saving Bank Deposits Accounts where there is no minimum Monthly Average Balance (MAB) to be maintained.

Let’s know more about the BSBDA account.

Basic savings bank account

You must have heard in news few days back that SBI has collected Rs.1771 Crores from penalty on not maintaining minimum balance limit. Not maintaining minimum balance attracts penalties and his happens with lot of people.

Basic Saving bank deposit account – Meaning

Basic savings bank deposit account (BSBDA) is the zero balance bank accounts. This means you don’t need to maintain any kind of minimum balance limit in this account.

RBI has made it mandatory for all the banks to offer this service to people who are unable to maintain the minimum balance. Criteria to open this account are similar to the eligibility criteria of normal savings bank account. Banks may have their own criteria’s based on age or income.

However as per the guidelines of RBI, banks are advised not to impose any criteria of age or income for opening BSBDA. The features of Basic Savings Bank Deposit Account are given below:

Features of Basic Savings Bank Deposit Account :

  • No minimum balance limit.
  • No limit for money deposit.
  • Interest rate is similar to regular savings account.
  • Normally there is no upper credit limit (these criteria may vary from bank to bank).
  • No minimum amount required for opening the account.
  • ATM cum Debit and passbook facility is provided totally free of cost.
  • Checkbook facility and online funds transfer facility is available.
  • No charges are applicable on any kind of transactions (within limit).
  • Account holder can open FD and RD.

Limitations of Basic Saving bank accounts

As I said earlier this is a zero balance account without any extra charges, but it has some restrictions or limitations as follows.

  • Only 4 withdrawals per month are allowed, including branch cash withdrawal, ATM withdrawal, NEFT, RTGS, online payment, EMI etc.
  • It depends on banks to either charge additional fees for extra withdrawal transactions or not.
  • Your BSBDA will convert into normal savings account automatically if the transactions limit increases.
  • Central KYC (A centralized KYC process to avoid submitting multiple KYC’s) should be done, otherwise the account will be considered as BDBDA-small account (explained below).

What is Basic Savings Bank Deposit-small account?

This is an account which can be opened by a person who is above 18 years of age but does not have any official KYC document (Like Aadhaar card, PAN or other ID proof and address proof etc.). For this a person needs to submit self-attested photograph and he/she needs to sign the form and also provide thumb prints in the presence of bank officials.

The basic savings account of a person who doesn’t have a CKYC is treated as a Basic savings bank deposit small account. Features of this account are as given below :

  • This account is valid only for 12 months. It can be extended for next 12 months by providing proof of having applied for officially valid documents.
  • The balance should not exceed Rs.50,000 at any point.
  • Aggregate of all credits in a financial year should not exceed Rs.1 Lac.
  • Mobile banking facility may not be available.

Can I convert my existing savings account into Basic Saving bank account?

There is no provision till date to convert existing savings account into BSBDA. You have to open a new BSBDA and for that you need to close you existing savings account within 30 days of opening a BSBDA otherwise bank will automatically close your earlier account after 30 days. A person can have only one BSBDA in a bank

Banks are restricted to offer any value added services to the BSBDA account holders by charging any extra cost. If any extra service is given, then automatically the account will convert to a normal saving bank account..

Documents required for opening Basic Savings Bank Deposit Account

Documents required for opening BSBDA are as :

  1. Account opening form.
  2. Colored passport sized photograph.
  3. KYC documents like – ID proof, address proof, PAN etc.

Difference between normal savings account and BSBDA

Normal savings account Basic savings account Small savings account
Minimum balance limit 10000 No limit No limit
Penalty if minimum balance is not maintained Applicable Not applicable Not applicable
Withdrawal limit Not applicable Applicable Applicable
Mobile banking facility Available May not be available Not available
Credit limit No limit No limit 50000

Who should open this “Basic Savings Bank Deposit Account”?

Now you must be thinking “What is the use of this account for me? I have my regular account with unlimited transactions then why should I open a basic savings bank deposit account?..”

Let me tell you, there are lots of people around us who don’t have a bank account because they can’t maintain the minimum balance limit. Like some students, employees who have just entered into their profession, small scale workers, maid, driver and so many other people.

There are also some people who have more than one or two bank accounts other than their regular accounts. For those people the money is kind of stuck in their bank accounts where they have to maintain the minimum balance limit.

Some senior citizens don’t require more bank transactions as they are either dependent on their children financially or they keep cash to avoid visiting banks or ATM’s every time for withdrawals when they need money. For such people Basic savings bank deposit account is a good option to avoid the penalty and other extra charges for maintaining their bank account.

I hope this information was useful for you .. If you have anything to add, do comment below.

20 replies on this article “Basic Saving Bank Account – No minimum balance required (+ more features)”

  1. Nayan says:

    Nice Helpful Post Thanks For Sharing

    1. Jagoinvestor Admin says:

      Thanks Nayan

  2. Manglesh Rao says:

    बहुत खूब जानकारी ! आपके नियमित ब्लॉग पढ़ कर हमें प्रेरणा मिलती हैं!

    1. Jagoinvestor Admin says:

      Thanks Manglesh Rao

  3. Francis D Fernandes says:

    It is required to have a savings account in order to manage your home loan with the bank. Can such saving account also can be converted to basic saving account as i do not have any transaction being carrier out there.

    1. Jagoinvestor Admin says:

      Hi Francis D Fernandes
      As Per my research you can convert any of your savings account into BSBD account. Although you should contact your bank branch to confirm this.

  4. Matt Looks says:

    Really nice info sir , Blog full of knowledge !

    1. Jagoinvestor Admin says:

      Thanks for your comment Matt Looks .. Please keep sharing your views like this..

      Manish

  5. Ashok dixit says:

    Basic saving account good for small earning people. Net banking and mobile banking, debit card facility also available. Plus no account related charges.
    I think its best choice for less earners who want to open account.

    1. Jagoinvestor Admin says:

      Hi Ashok dixit
      Yes you are right, it for those people who are unable to maintain the monthly average minimum balance in their accounts.

  6. Ajitabh says:

    Got your point… Well written article… Will follow you on Social on networks also…Thanks for sharing

    1. Jagoinvestor Admin says:

      Hi Ajitabh
      Glad to know you like the article. keep sharing your views like this and also share the post so that it can reach more people.

  7. Sir please help PM and Jan Dhan account difference.

    1. Jagoinvestor Admin says:

      Hi Bappaditya Mukherjee
      Do you want to know the difference between Jan Dhan account and BSBD account? The features of both these accounts are similar. It’s just, Jan Dhan accounts have started recently under the scheme by PM and BSBD accounts are there in banks since long time.

  8. Sanjeev says:

    Over the years I have opened many accounts in a number of banks. Most of these are inactive. These non active accounts have balance over 1 lakh. The bank makes such accounts as in active and they ask me to make a transaction to make the account active again.
    It is better to keep one or two active accounts and close the others. Having too many accounts makes it difficult to estimate the interest received on savings accounts while filling the income tax returns. I am planning to keep only one savings account and one NRE account.

    1. Jagoinvestor Admin says:

      Hi Sanjeev
      Thanks for sharing your views. It’s a good suggestion to have one or maximum two savings accounts to avoid difficulties.

  9. Nilesh says:

    How is this different from PM Jan dhan account ?
    Why this and not a Jan dhan, since it is also zero balance account with rupay card and insurance too ?
    Please reply

    1. Jagoinvestor Admin says:

      Hi Nilesh
      Features of both these accounts are similar. But Jan Dhan account has been introduced under the scheme launched by PM in recent years. And BSBD accounts were already there in almost all banks, its just banks were reluctant to open these kind of accounts.

  10. Vishal says:

    Nice post, It would be a better if you can add the details of where can I open these basic saving accounts.

    1. Jagoinvestor Admin says:

      Hi Vishal
      You can open this account at any bank that provides good services.

Comments are closed.

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