Zero Balance Account (ZBA) - Definition

An account that maintains no funds in it because the account holder transfers only enough funds into it to cover checks written on it. A zero balance account exists so companies can prevent excessive balances on accounts and more effectively control how they distribute funds.

The concept of a zero balance account may be utilized for several reasons. One of the most common advantages of maintaining a balance of zero in the checking account is that the resources of the business or organization can be housed in other financial accounts that are interest bearing. This means that funds can earn more interest, only being moved into the checking account just before the checks are due to be presented for payment. As a result, the company may achieve a significant Amount of interest income over the course of the Calendar year.



Terms near "Zero Balance Account (ZBA)"

Zero Basis Risk Swap (ZEBRA)
Zero Bound
Zero Cost Collar
Zero Coupon
Zero Coupon Bond
Zero Coupon Inflation Swap
Zero lot line
Zero Minus Tick
Zero Plus Tick
Zero Prepayment Assumption
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