Business, Legal & Accounting Glossary
A zero balance account (ZBA) is a checking account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover checks presented.
An Account used by a company handling very large endorsements.
A zero balance account (ZBA) is a type of cash pooling account. It is typically in the form of a checking account that receives automatic funding from a central account in an amount sufficient to cover presented checks. To do so, the bank computes the total amount of all checks presented against a ZBA and debits the central account. In addition, if a deposit is made into a ZBA account, the amount is automatically transferred to the central account. Furthermore, if a subsidiary account has a debit (overdrawn) balance, cash is automatically transferred from the central account to the subsidiary account in an amount sufficient to restore the account balance to zero. Furthermore, subsidiary account balances can be set to a specific target amount rather than zero, retaining some residual cash in one or more accounts.
There are three types of ZBA transactions, all of which take place automatically:
The net result of a ZBA is that a company keeps the majority of its cash in a central account and only withdraws cash from that central account to meet immediate needs. Because there is so little cash in the zero-balance account, this method also reduces the risk of a fraudulent transfer out of it. One significant advantage of the zero balance account is that cash can be accumulated to take advantage of better investment opportunities.
ZBA
Account executive
Balance of payments
Balance of trade
Balance sheet
Balance sheet exposure
Balance sheet identity
Basic balance
Capital account
Cash account
Compensating balance
Concentration account
Cumulative translation adjustment cta account
Current account
Discretionary account
Divided account
Double declining balance depreciation
Eastern account
Error account
Excess cash balance
Frozen account
General account
Individual retirement account
Investment account
Joint account
Margin account
Margin account stocks
Money market demand account
Net cash balance
Non discretionary account
Off balance sheet activities obsas
Off balance sheet financing
Omnibus account
On balance volume
Open account
Receivables balance fractions
Remaining principal balance
Separate account
Sweep account
Target cash balance
Tt&l; account
Undivided account
Western account
Zero beta portfolio
Zero cost collar
Zero coupon bond
Zero curve
Zero growth model
Zero investment portfolio
Zero minus tick
Zero one integer programming
Zero or low coupon bonds
Zero plus tick
Zero prepayment assumption
Zero sum game
Zero uptick
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This glossary post was last updated: 13th April, 2022 | 0 Views.