A corporate checking account in which a zero balance is maintained. Differently put, this constitutes a disbursement account that always has an end-of-day balance of zero. It is typically used to eliminate nonearning cash balances in corporate checking accounts. The account requires that a master account (parent account) is maintained in order to draw funds from which to cover negative balances (shortages) in subsidiary accounts or to send thereto excess balances (surpluses) in subsidiary accounts.
Zero-balance accounts (ZBAs) help improve control over disbursements and eliminate idle cash balances from all subsidiary disbursement accounts.
