What is a Zero-Balance Account?
A zero-balance account (or "ZBA") is a business-oriented bank account that usually has a balance of $0.
How Does a Zero-Balance Account Work?
Let's say restaurant company XYZ keeps its accounting department writes checks to pay the bills due that week. This week, the amount of those checks is $40,150.
Company XYZ wants to keep its centralized in one account that pays interest. To keep as much in the interest-bearing account, it moves only $40,150 out of the account on Tuesday so that the checks clear.
Why Does a Zero-Balance Account Matter?
ZBAs help companies avoid having spread out over several different bank accounts, which costs the company interest and creates more bookkeeping work.