diff --git a/.gitignore b/.gitignore
index 728c195b5..e11f667cd 100644
--- a/.gitignore
+++ b/.gitignore
@@ -10,6 +10,5 @@ target
 grin.log
 wallet.seed
 test_output
-wallet_data
-wallet/db
+wallet*
 .idea/
diff --git a/controller/tests/transaction.rs b/controller/tests/transaction.rs
index 95b176340..2171404b6 100644
--- a/controller/tests/transaction.rs
+++ b/controller/tests/transaction.rs
@@ -18,6 +18,7 @@ extern crate grin_wallet_controller as wallet;
 extern crate grin_wallet_impls as impls;
 extern crate grin_wallet_libwallet as libwallet;
 
+use self::core::core::transaction;
 use self::core::global;
 use self::core::global::ChainTypes;
 use self::keychain::ExtKeychain;
@@ -106,9 +107,26 @@ fn basic_transaction_api(test_dir: &str) -> Result<(), libwallet::Error> {
 			true,   // select all outputs
 			None, None,
 		)?;
+
+		// Check we are creating a tx with the expected lock_height of 0.
+		// We will check this produces a Plain kernel later.
+		assert_eq!(0, slate.lock_height);
+
 		slate = client1.send_tx_slate_direct("wallet2", &slate_i)?;
 		sender_api.tx_lock_outputs(&slate)?;
 		sender_api.finalize_tx(&mut slate)?;
+
+		// Check we have a single kernel and that it is a Plain kernel (no lock_height).
+		assert_eq!(slate.tx.kernels().len(), 1);
+		assert_eq!(
+			slate.tx.kernels().first().map(|k| k.lock_height).unwrap(),
+			0
+		);
+		assert_eq!(
+			slate.tx.kernels().first().map(|k| k.features).unwrap(),
+			transaction::KernelFeatures::Plain
+		);
+
 		Ok(())
 	})?;
 
diff --git a/libwallet/src/internal/tx.rs b/libwallet/src/internal/tx.rs
index 8af3682d3..ae95a6758 100644
--- a/libwallet/src/internal/tx.rs
+++ b/libwallet/src/internal/tx.rs
@@ -38,7 +38,11 @@ where
 	let mut slate = Slate::blank(num_participants);
 	slate.amount = amount;
 	slate.height = current_height;
-	slate.lock_height = current_height;
+
+	// Set the lock_height explicitly to 0 here.
+	// This will generate a Plain kernel (rather than a HeightLocked kernel).
+	slate.lock_height = 0;
+
 	Ok(slate)
 }