What is a Zero Balance Account?

A zero-balance account, sometimes called a '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 cash in a checking account. Every Tuesday, 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 cash centralized primarily in a savings account that pays interest. To keep as much money in the interest-bearing savings account, it moves only $40,150 out of the savings account and into the checking account on Tuesday so that the checks clear.

Why Does a Zero-Balance Account Matter?

Zero balance accounts help companies maximize interest revenue, but they also lead to additional money transfers and more bookkeeping work.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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