Why BSBDAs have an upper hand over regular ones?

Many people are in the habit of maintaining more than one savings account which requires them to maintain a minimum balance in each one of them. This not only blocks huge amounts of their savings, but they also have to pay a penalty in case there is non-maintenance of the prescribed monthly average balance (MAB). So, you see, having such accounts is one thing and maintaining them is another, and we tell you that maintaining them is not everyone’s cup of tea.

Therefore, we advise keeping just a Basic Savings Bank Deposit Accounts (BSBDA) that has many advantages to it apart from being a zero-balance savings account. Doing so will help the account holder streamline the transactions.

The account caters to those hailing from weaker sections of the society and the guidelines, as prescribed by the Reserve Bank of India (RBI), are applicable to all scheduled commercial banks across the country. This includes even the foreign banks having branches in India.

However, the RBI has left it to the banks to provide or charge additional-value added services like issuance of cheque books, etc.

Apart from this, what lures customers towards the BSBDA is the interest rate. It is the same as that of any regular savings account. So, it is almost like, ‘having the cake and eating it too’. This means that the account holder enjoys all the benefits that a regular savings account holder has access to and does not have to worry about maintaining the minimum balance.

Below given are some features of this Basic Savings Bank Deposit Accounts in nutshell

• It does not require initial deposit 
• No minimum balance required  
• Aggregate of all credits in FY must not exceed Rs 1 lakh
• Balance amount must not exceed Rs 50,000
• Can be opened by any individual or Hindu Undivided Family (HUF) entity not having any other savings account in that particular bank or its branches
• Offers free-of-cost banking facilities, like ATM cum-debit card, deposit/ withdrawal, online payment channels, etc
• Offers four free cash withdrawals including withdrawals from ATM, bank branch, online fund transfer or EMI in a month  
• Allows unlimited number of deposits in a month
• Validity of small accounts is 12 month which can be extended by another 12 months.

However, there is a little catch in it. If a customer has another savings bank account, it should be closed within 30 days from the date of opening BSBDA. This is because there is no provision to convert a regular account into a no-frill account.