diff --git a/pallets/asset-index/src/lib.rs b/pallets/asset-index/src/lib.rs
index 277805a9fa..2c1756515e 100644
--- a/pallets/asset-index/src/lib.rs
+++ b/pallets/asset-index/src/lib.rs
@@ -747,10 +747,15 @@ pub mod pallet {
 				.ok_or_else(|| ArithmeticError::Overflow.into())
 		}
 
-		/// Adds liquid asset
+		/// Adds liquid asset units
 		///
-		/// - If asset not exists, create asset
 		/// - If asset exists, deposit more units into matched asset
+		///
+		/// This function is a no-op if:
+		///  - The `units` to be converted is zero, this would be analogous to
+		///    [`LocalTreasury::withdraw`]
+		///  - The `amount` of index tokens to be received is less than the required ED and the
+		///    account does not exist.
 		fn do_add_asset(
 			recipient: T::AccountId,
 			asset_id: T::AssetId,
@@ -763,7 +768,7 @@ pub mod pallet {
 				return Ok(());
 			}
 
-			// transfer the caller's fund into the treasury account
+			// transfer the caller's funds into the treasury account in exchange for index tokens
 			Self::add_liquid(&recipient, asset_id, units, amount)?;
 
 			Self::deposit_event(Event::AssetAdded(asset_id, units, recipient, amount));
@@ -789,7 +794,7 @@ pub mod pallet {
 			Self::remove_liquid(&who, asset_id, units, index_tokens, recipient.clone())?;
 
 			Self::deposit_event(Event::AssetRemoved(asset_id, units, who, recipient, index_tokens));
-			Ok(().into())
+			Ok(())
 		}
 
 		/// The fee model depends on how long LP contributions remained in the index.
@@ -858,7 +863,7 @@ pub mod pallet {
 		///
 		/// *NOTE*:
 		///   - This does not account for fees
-		///   - This is a noop for `redeem == 0`
+		///   - This is a no-op for `redeem == 0`
 		pub fn liquid_asset_redemptions(
 			redeem: u128,
 		) -> Result<AssetRedemption<T::AssetId, T::Balance>, DispatchError> {
diff --git a/pallets/asset-index/src/mock.rs b/pallets/asset-index/src/mock.rs
index 40bbaa0c86..278aaf2567 100644
--- a/pallets/asset-index/src/mock.rs
+++ b/pallets/asset-index/src/mock.rs
@@ -12,7 +12,7 @@ use pallet_price_feed::PriceFeedBenchmarks;
 use crate as pallet_asset_index;
 use frame_support::{
 	ord_parameter_types, parameter_types,
-	traits::{GenesisBuild, LockIdentifier, StorageMapShim},
+	traits::{GenesisBuild, LockIdentifier},
 	PalletId,
 };
 use frame_system as system;
@@ -79,7 +79,7 @@ impl system::Config for Test {
 	type DbWeight = ();
 	type Version = ();
 	type PalletInfo = PalletInfo;
-	type AccountData = ();
+	type AccountData = pallet_balances::AccountData<Balance>;
 	type OnNewAccount = ();
 	type OnKilledAccount = ();
 	type SystemWeightInfo = ();
@@ -97,7 +97,7 @@ ord_parameter_types! {
 // param types for balances
 parameter_types! {
 	pub const MaxLocks: u32 = 1024;
-	pub static ExistentialDeposit: Balance = 0;
+	pub static ExistentialDeposit: Balance = 2;
 }
 
 impl pallet_balances::Config for Test {
@@ -105,12 +105,7 @@ impl pallet_balances::Config for Test {
 	type DustRemoval = ();
 	type Event = Event;
 	type ExistentialDeposit = ExistentialDeposit;
-	type AccountStore = StorageMapShim<
-		pallet_balances::Account<Test>,
-		system::Provider<Test>,
-		AccountId,
-		pallet_balances::AccountData<Balance>,
-	>;
+	type AccountStore = System;
 	type WeightInfo = ();
 	type MaxLocks = MaxLocks;
 	type MaxReserves = ();
@@ -118,8 +113,12 @@ impl pallet_balances::Config for Test {
 }
 
 parameter_type_with_key! {
-	pub ExistentialDeposits: |_asset_id: AssetId| -> Balance {
-		Zero::zero()
+	pub ExistentialDeposits: |asset_id: AssetId| -> Balance {
+		if *asset_id == ED_ASSET_ID {
+			Balance::MAX / 2
+		} else {
+			Zero::zero()
+		}
 	};
 }
 
@@ -199,8 +198,9 @@ impl pallet_asset_index::Config for Test {
 pub const PINT_ASSET_ID: AssetId = 0u32;
 pub const ASSET_A_ID: AssetId = 1u32;
 pub const ASSET_B_ID: AssetId = 2u32;
-pub const SAFT_ASSET_ID: AssetId = 99u32;
 pub const UNKNOWN_ASSET_ID: AssetId = 3u32;
+pub const SAFT_ASSET_ID: AssetId = 99u32;
+pub const ED_ASSET_ID: AssetId = 99999999u32;
 
 pub const ASSET_A_PRICE_MULTIPLIER: Balance = 2;
 pub const ASSET_B_PRICE_MULTIPLIER: Balance = 3;
diff --git a/pallets/asset-index/src/tests.rs b/pallets/asset-index/src/tests.rs
index 32d17ebe7c..9dbe4a2134 100644
--- a/pallets/asset-index/src/tests.rs
+++ b/pallets/asset-index/src/tests.rs
@@ -2,7 +2,7 @@
 // SPDX-License-Identifier: LGPL-3.0-only
 
 use frame_support::{assert_noop, assert_ok, traits::Currency as _};
-use orml_traits::MultiCurrency;
+use orml_traits::{GetByKey, MultiCurrency};
 use rand::Rng;
 use sp_runtime::{traits::Zero, FixedPointNumber};
 use xcm::v0::MultiLocation;
@@ -648,3 +648,26 @@ fn can_withdraw() {
 		assert_eq!(pending.assets.len(), 2);
 	})
 }
+
+#[test]
+fn add_asset_less_than_existential_deposit_is_noop() {
+	new_test_ext_with_balance(vec![]).execute_with(|| {
+		assert_ok!(AssetIndex::register_asset(
+			Origin::signed(ACCOUNT_ID),
+			ED_ASSET_ID,
+			AssetAvailability::Liquid(MultiLocation::Null)
+		));
+
+		let ed = ExistentialDeposits::get(&ED_ASSET_ID);
+		assert_ok!(Currency::deposit(ED_ASSET_ID, &ACCOUNT_ID, ed));
+
+		// index token payout less than ED is a no-op
+		assert_ok!(AssetIndex::add_asset(
+			Origin::signed(ACCOUNT_ID),
+			ED_ASSET_ID,
+			ed,
+			ExistentialDeposit::get().saturating_sub(1)
+		));
+		assert!(AssetIndex::index_token_balance(&ACCOUNT_ID).is_zero());
+	});
+}