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Savings accounts with zero balances don’t require a minimum balance to be kept open and utilized for any purpose. Unlike a traditional savings account, there are no penalties for not keeping an adequate balance.
Banks primarily offer zero-balance savings accounts to encourage customers to use their services, save money, and access formal credit markets. Those from average-income categories can open zero balance account for several reasons. Continue reading to learn why is a zero balance account a blessing for ordinary earners:
simple to open
A major obstacle to financial inclusion is the difficulty of opening a bank account. Many people with low incomes either reside in places where banks are difficult to access or lack the necessary identification or papers to create an account.
Zero balance accounts can help remove these obstacles by making it simpler to open an account. Furthermore, opening one of these accounts can frequently be done online, which streamlines and improves accessibility. Therefore, open zero balance account, as it won’t cost you money or effort as an ordinary earner.
Encourages Savings
The fact that zero balance accounts promote saving is another important advantage. Even though many low-income people don’t have much money to save, tiny sums can build up over time. Zero balance accounts are an option for those who want to start saving without worrying about keeping a minimum level.
In addition, many banks provide bonuses and benefits for putting money into zero-balance accounts.
For instance, some banks offer greater interest rates or cash-back incentives in exchange for keeping a specific amount in a zero-balance account. For those with modest incomes, these benefits may be a strong motivation to begin and maintain savings.
Decreases Reliance on Unofficial Credit
Many low-income people in rural areas frequently rely on unofficial credit sources, such as moneylenders, to meet their financial needs.
Unfortunately, these lending options often have exorbitant interest rates, which can force borrowers into a never-ending debt cycle.
People can lessen their reliance on these unofficial sources of credit and stay out of debt traps by accessing conventional financial services like zero-balance accounts.
Advances Financial Knowledge
Lastly, using accounts with zero balances can help advance financial knowledge. By opening an online bank account, people can begin learning about fundamental financial ideas like interest rates, savings, and budgeting. They can use this knowledge to plan for the future and make wiser financial decisions.
Financial institutions can be quite important when it comes to encouraging financial inclusion among low-income communities. By providing zero-balance accounts and other related services, they can contribute to ensuring that everyone has access to fundamental financial services. They can also significantly improve the lives of low-income people by assisting them in ending the cycle of poverty and achieving financial stability.
Final words:
Being an ordinary earner brings many challenges. You should be highly cautious about spending and savings. You have to work smartly to get promotions to elevate your career. In such a scenario, opening a new bank account with zero balance criteria is good for you, as mentioned above.
