Have you received an SMS from the Reserve Bank of India (RBI) asking you to open a basic savings bank deposit (BSBD) account if you don’t want to maintain a minimum balance in your account and can do with just 4 debits in a month? 

“Don’t want to keep minimum balance in your account and won’t have more than four debits in a month? Open BSBD A/c. To know more, give missed call to 14440," said the SMS from RBI’s sender ID RBISAY.

If the zero minimum balance sounds attractive to you, consider its other features and restrictions to figure out if it’s meant for you.

What is it?

These accounts are primarily aimed towards enhancing financial inclusion among the economically weaker sections of the society. The earlier no-frills accounts also come under BSBD accounts.

There is no need for a minimum balance even at the time of opening the account. You will get an ATM-cum-debit card without any fees, not even the annual maintenance fee. Deposit and withdrawal services are free of cost, and so is the passbook facility. Also, the bank cannot levy charges for non-operation or activation of an inoperative account.

Providing a cheque book is not mandatory for banks, but they can, at their own discretion, provide it free of charge. Banks can also give additional services, at their own discretion, such as more number of withdrawals, but at no cost.

Banks typically provide the same rate on these accounts as they do on regular savings accounts. 

Who can open it?

Anyone can open this account using regular KYC (know-your-customer) documents. You can even request your bank to convert your existing savings account into a BSBD.

In case you open a new BSBD account but already have a savings account in the same bank, you would need to give an undertaking declaring the same and have to close the regular savings account within a month. However, you will be free to open fixed or recurring deposit accounts with the same bank. 

The restrictions

As the SMS suggests, you can only make four 4 debits in a month, either directly from the branch, ATM or through electronic transfers. Moreover, you can’t credit more than 1 lakh in a BSBD account in a year and can’t have more than 50,000 in it at any time. Also, the total debits by cash withdrawals and transfers in a month cannot exceed 10,000. 

So are you up to opening a BSBD account?

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