posted on 06-06-2019

ZBA

Updated October 1, 2019

What is ZBA?

A zero-balance account (or ZBA) is a business-oriented bank account that usually has a balance of $0.

How Does ZBA Work?

For example, let's say that restaurant company XYZ keeps its cash in Account A, an interest-bearing account. Every Tuesday, its accounting department writes checks on Account B, a checking account that Company XYZ has set up as its ZBA, to pay the bills due that week. This week, the amount of those checks is $40,150.

Company XYZ wants to keep its cash centralized in one account that pays interest. To keep as much money in the interest-bearing account as possible, Company XYZ moves only $40,150 out of Account A into Account B on Tuesday so the checks clear.
 

Why Does ZBA Matter?

ZBAs help companies avoid having money spread out over several different bank accounts, which costs the company interest and creates more bookkeeping work.