Zero-balance account

A zero-balance account is a checking account which always contains a balance of zero funds. When an entity makes a check payment, it transfers only enough funds into the account to maintain a zero balance once the check has been paid. By doing so, an entity can harbor its cash within a master account for investment purposes. This approach also reduces the risk of a fraudulent transfer out of the zero-balance account, since there is so little cash in it.

Related Courses

Corporate Cash Management