Zero Balance Account

Written By
Paul Tracy
Updated July 20, 2021

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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