Zero Balance Account
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 accounting department writes checks to pay the bills due that week. This week, the amount of those checks is $40,150.in a checking account. Every Tuesday, its
Company XYZ wants to keep itscentralized primarily in a savings account that pays interest. To keep as much 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.