Overdraft facility of zero balance account: What top lenders are offering

During tough times such as the Covid-19 pandemic, most of us look for sources of emergency fund but arranging it is no easy task. There are few banks which offer two to three months’ salary as overdraft (OD) amount to zero balance account holders. These banks also offer easy instalment options before the customers to repay the loan. Popular banks such as SBI, PNB, ICICI and HDFC are offering different overdraft facility to those customers, who have zero balance account. However, these accounts must be salary accounts. No zero balance savings accounts except PM Jan Dhan Yojona (PMJDY) account are entitled to get this overdraft facility.

SBI

Largest lender State Bank of India (SBI) offers attractive overdraft facility to its zero balance salary account holders. The largest commercial bank of India gives up to two months’ salary under overdraft facility to the SBI salary account holders.

The overdraft amount depends upon the person’s salary amount. And the interest rate starts from 10% per annum.

PNB

Second largest public sector bank Punjab National Bank (PNB) also offers the same facility. A PNB salary account holder can get an overdraft facility up to a sum representing last two months’ salary amount. PNB divides its customer’s salary accounts into four different categories – silver, gold, premium and platinum. These divisions are based on drawing of gross salary per month. The maximum overdraft amount varies from Rs 50,000 and goes up to Rs 3 lakh.

The interest rates of this overdraft facility vary between 10.5% and 12% depending upon multiple factors.

HDFC Bank

Largest private lender HDFC Bank offers zero balance salary account holders more attractive offer. A salary account holder can get three times of his/her gross salary as credit. However, one can get an overdraft facility up to Rs 1.5 lakh depending upon the salary amount and credit score.

ICICI Bank

The facility can be sanctioned immediately while customers can start using the approved OD limit within 48 hours. The interest payable on the OD is calculated on the actual amount availed by the customer, not on the full amount of the OD sanctioned.

The bank offers customers a credit limit worth up to three times their net salary. Both credit limit and OD are approved instantly. The rate of interest varies between 12.5% and 14%.

Apart from these four major banks, all PMJDY account holders are entitled to get an overdraft facility against their zero balance savings accounts. Irrespective of banks all customers are entitled to get this facility.

PMJDY accounts

The scheme allows the PM Jan Dhan account holders to take an overdraft facility up to Rs 10,000 in the form of a short-term loan. This limit was earlier Rs 5,000 but the government doubled the amount in 2020 at the onset of covid pandemic. All PSBs and private lenders are bound to extend this offer to the customers.