A type of business bank account that automatically transfers all funds to or from a central account at the end of each business day, leaving the balance at zero.
What is a Zero Balance Account (ZBA)?
A Zero Balance Account (ZBA) is used by businesses to streamline cash management and improve control over funds. In this arrangement, multiple subsidiary accounts (such as accounts for different departments, locations, or purposes) are linked to a central master account. At the end of each business day, the bank automatically moves funds from the ZBA to the master account or from the master account to the ZBA, so that the ZBA’s ending balance is exactly zero.
This system allows companies to maintain separate accounts for operational purposes, such as payroll, expenses, or client transactions, without keeping idle cash in those accounts. The master account holds all the actual funds, reducing the risk of overdrafts and making it easier to track and manage overall liquidity.
For non-U.S. founders with U.S. businesses, ZBAs can be especially beneficial if the company manages multiple accounts for different business functions or operates across several states. By consolidating cash, ZBAs help optimize interest earnings, simplify reconciliations, and maintain tighter security over company funds.
