Minimum Balance Charges in Savings Accounts: If you open a savings account in a bank, the bank often asks you to maintain a minimum balance. This amount may vary depending on the type of account and the services offered by the bank. If you do not maintain this minimum balance, the bank charges you a penalty. These charges are levied to recover the cost of maintaining and managing the bank account.According to a report, during the last 5 years, PSU banks have charged Rs 8,495 crore as penalty from those customers who did not maintain minimum balance in their savings account. Although State Bank of India (SBI) has removed these charges a few years ago, many other banks are still charging these charges.
What is the minimum balance requirement?
Minimum balance is the minimum amount that the bank asks you to maintain in your savings account and if you fall short of it, you may have to pay a penalty. This amount not only varies from bank to bank, but can also vary depending on the type of account you have and the free services provided by the bank.
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What is average monthly balance?
Average Monthly Balance (AMB) is the minimum balance that you have to maintain in your account for the entire month. Banks calculate the AMB of your account by adding the closing balance of each day of the month and dividing it by the number of days in the month. If your AMB is below the required level, the bank will inform you about it within two months. If you still do not maintain the minimum balance, the bank will deduct non-maintenance charges directly from your savings account. Let’s see how much charge is being taken for not maintaining the minimum balance in several major banks:
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State Bank of India (SBI)
– Minimum balance charge: No charge. SBI does not levy any penalty for not maintaining minimum monthly average balance. These charges have been abolished in 2020.
HDFC Bank
– In Metro and Urban areas: You need to maintain a balance of Rs 10,000 or have a fixed deposit of Rs 1 lakh with a minimum tenure of one year and one day.
– In semi-urban areas: Balance of Rs 5,000 or fixed deposit of Rs 50,000 is required.
– Penalty: 6% of shortfall in average balance or Rs 600 (whichever is lower).
Also read: SIP in SBI: Rs 1.04 crore collected from SIP of Rs 2300, how did this scheme of SBI Mutual Fund do this miracle
ICICI Bank
– Minimum Monthly Average Balance (MAB): Rs 5,000.
– Penalty: Rs 100 + 5% of the shortfall in required MAB.
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Punjab National Bank (PNB)
– In rural areas: Minimum balance of Rs 400.
– In semi-urban areas: Minimum balance of Rs 500.
– In Urban/Metro areas: Minimum balance of Rs 600.
– Penalty: Charges for not maintaining minimum balance vary depending on the location.
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Yes Bank
– Minimum Balance Charge: No charge.
– If balance is more than 50% of required balance: 5% charge of shortfall.
– If the balance is 50% or less of the required balance: 10% shortfall charge, or 5% charge for Savings Value Account.
