What is a zero balance account? Zero balance accounts are commercial checking accounts that are automatically maintained at a zero balance. Checks written on or deposited to a zero balance account are transferred to a designated funding account on a same-day basis. Pooling of funds in this manner allows for maximum use of cash.
Who can benefit from a zero balance account?
Companies that may have multiple depository accounts
Companies that want to reduce the clerical efforts involved in monitoring separate accounts
Companies that want to fund an account on an “as needed" basis
How does it work?
You establish a main or funding account and any number of subsidiary accounts for specific purposes, such as payroll, operating expenses, or tax liability, etc.
At the end of each day, the net balances from the subsidiary accounts are moved to the funding account, keeping the subsidiary account balances at zero
Checks are automatically covered by the funding account
Transactions are reflected on the account statement for both the subsidiary and funding accounts
Benefits to you
Increased investment opportunity and decreased borrowing activity
Reduces the need to gather information and make transfer entries
Time and money are saved
Home Federal Savings Bank 1016 Civic Center Drive Northwest Rochester, MN 55901 Phone: 507-535-1200
