Many governments use zero-balance accounts (ZBAs) to collect funds. The
balances on these accounts are brought to zero at the end of the day and
transferred to a concentration account. These accounts are especially useful
for governments that need to segregate funds in different bank accounts.
Also, government agencies at outlying locations, such as community recreation
centers, parks departments, and civic centers, find ZBAs useful because
they can deposit their funds into a branch of the government’s bank. At the
end of the day, the bank will automatically transfer those funds into the government’s
master ZBA or concentration account. Using a ZBA account
structure reduces the government’s bank costs and allows for the automated
transfer of funds into one account for investment.