Opening BSBD account? From KYC norms to ATM charges - Here are answer to your 10 questions
One of the best charm of BSBD account is that, customers do not have to worry about minimum balance, and still earn interest rates which are offered by banks on normal savings accounts.
Maintaining a savings account can become tricky. Even though it helps you earn interest rates, it comes with charges if you have not maintained a minimum average balance in this account. Minimum balances in savings account varies from bank to bank. To keep a track of how much to maintain, is always a burdensome task. Thereby, if you are among those customers, then here you can avail a Bank Savings Bank Deposits (BSBD) account, which are opposite of traditional savings account but operate in a similar manner. One of the best features of BSBD account is that customers do not have to worry about minimum balance, and still earn interest rates which are offered by banks on normal savings accounts. Simply put, a BSBD account is best referred as zero-balance account. However, even a BSBD account has different pattern of functioning, especially when it comes to financial transactions. Unlike savings account, there are various limitations in BSBD account. Here’s a list of 10 queries answered for you, if you are planning to open this account.
RBI on its website, has given a detailed guidelines in regards to BSBD account. Let’s find out.
1. Can you have any number of BSBD Account? Or Can you have a savings account, while still holding BSBD one?
Sadly, an individual is eligible to hold only one BSBD account in one bank. Thereby, if you want to opt more than one, then you will have to apply for BSBD account in different banks as well.
Also holders having a BSBD account, is not eligible for opening any other savings account in one bank. If a customer has any other existing savings account in that bank, he/she will be required to close it within 30 days from the date of opening a BSBD.
2. Can you have other deposits account while holding BSBD?
As per RBI guidelines, a customer must be allowed to have term or fixed deposits or recurring deposits account, etc. in a bank while holding BSBD account.
3. What are the KYC norms for having BSBD Account?
A BSBD account is subject to provisions of PML Act and Rules and RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time. BSBDA can also be opened with simplified KYC norms.
However, if BSBDA is opened on the basis of Simplified KYC, the accounts would additionally be treated as “BSBDA-SMALL account” and would be subject to different conditions. Some of the common KYC documents are Aadhaar card, PAN card and passport size photograph among others.
4. Which services are available for free in BSBD account?
Services like deposit and withdrawal of cash; receipt / credit of money through electronic payment channels or by means of deposit / collection of cheques at bank branches as well as ATMs are free in BSBD account.
5. What are the withdrawal limits?
Generally, in savings account there are somewhat 4-5 withdrawals allowed in other bank ATMs in a month, while it is unlimited in case if money is removed from your bank branch ATM. If the withdrawal limit is exhausted in other bank ATM in a month, then you can still continue to remove money, but on transactions after the limit a customer will be charged extra depending upon banks in form of service charge. But shockingly, this is not the case in BSBD account.
In BSBD account, you can only make four transactions in a month. However, RBI does allow banks to offer other facilities which can include in allowing to remove money.
RBI stated that, the decision to allow services beyond the minimum prescribed has been left to the discretion of the banks who can either offer additional services free of charge or evolve requirements including pricing structure for additional value-added services on a reasonable and transparent basis to be applied in a non-discriminatory manner with prior intimation to the customers. Hence if you exhaust the limit, then you can visit your bank branch for further advice.
6. Will savings account five withdrawal in a month at other bank ATMs hold on BSBD as well?
RBI has strictly stated this as NO. According to central bank, in BSBD, a bank is required to free of charge minimum four withdrawals, through ATMs and other mode including RTGS, NEFT, Clearing, Branch cash withdrawal, transfer, internet debits, standing instructions, EMI etc. It is left to the banks to either offer free or charge for additional withdrawal/s.
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7. Is there any Annual Debit card, balance enquiry charge?
Banks are asked to offer the ATM Debit Cards free of charge and no Annual fee should be levied on such Cards. Also, Balance enquiry through ATMs should not be counted in the four withdrawals allowed free of charge at ATMs.
8. How does an account treated as ‘BSBDA-Small Account’?
Total credits in such accounts should not exceed one lakh rupees in a year. Maximum balance in the account should not exceed fifty thousand rupees at any time. The total of debits by way of cash withdrawals and transfers will not exceed ten thousand rupees in a month
Foreign remittances can not be credited to Small Accounts without completing normal KYC formalities
Small accounts are valid for a period of 12 months initially which may be extended by another 12 months if the person provides proof of having applied for an Officially Valid Document. Small Accounts can only be opened at CBS linked branches of banks or at such branches where it is possible to manually monitor the fulfilments of the conditions
9. Is there any age limit for opening BSBD Account?
Banks are advised not to impose restrictions like age and income criteria of the individual for opening BSBDA.
10. Can a savings account be converted in BSBD?
The service is allowed, however a savings account customer should give their consent in writing and they should be informed of the features and extent of services available in BSBDAs.
Thereby, if you have any above mentioned queries before opening BSBD account, then do take a note of RBI guidelines.
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