We have all heard of the no frills account for individuals, where you can maintain zero balance and still be permitted to use some facilities and not all facilities at a bank.
In fact, there is no difference between both and the Reserve Bank of India had asked banks to convert the No Frills Account to the Basic Savings Bank Account.
A few things you must note of the Basic Savings Deposit Account (BSDA)
Each individual can open only one account of this type. More than one account is strictly not permitted. If you already have a No Frills Account or a BSDA you should close the existing one, in case you want to open a new one.
However, there are no restrictions on opening a term deposit that is linked to a no Frills account or a BSDA account.
One may ask whether this zero balance accounts have restrictions on age, income etc. We wish to emphasize that there is no such restriction, except that you can open just one account.
Conditions required for the Basic Savings Deposit Account, which was earlier called A No Frills Account:
1) Total credits in these accounts should not be over Rs 1 lakh in a year.
2) You cannot deposit more than Rs 50,000 in the Basic Savings Deposit Account at one time.
3) If you want to open such no frills or BSDA Account, you can open them at branches that have core banking services available.
4) Interestingly, you need not open these accounts with any amount.
5) Your bank has to provide you a debit card without any charges. However, there are restrictions on withdrawals at the banks.
6) When opening the no Frills or the Basic Savings Deposit Accounts, banks must provide free of charge minimum four withdrawals, including through ATM and other modes.
However, beyond that the banks are free to levy charges, which should largely be non discriminatory in nature.
So, if you have any savings account where you maintain a minimum balance, you can convert the same to a no frills savings or the BSDA account.
Conclusion: While there is no difference between a savings account and a no frills account, the latter now cease to exists, as there has been a name change. The facilities are the same and may differ from bank to bank.
For example, ICICI Bank does not offer internet facilities on a no frills account, while others may do.
The bank does offer a free debit card though. These types of accounts are popular for those who rarely transact through banks.
You need to visit each bank to understand the services that they offer under the Basic Savings Deposit Account.