If you open a savings account in a bank, the bank requires you to maintain a minimum balance. This amount may vary depending on the type of account and the services offered by the bank and if you do not maintain this minimum balance, the bank may charge you a penalty. These charges are levied to recoup the costs of maintaining and managing your bank account.
According to a report, PSU banks charged Rs 8,495 crore in penalty over the last five years from customers who did not maintain a minimum balance in their savings accounts. Although the State Bank of India (SBI) abolished these charges a few years ago, many other banks still charge them.
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What is the minimum balance?
The minimum balance is the minimum amount that a particular bank requires you to maintain in your savings account. If the amount in your account falls below the pre-decided threshold, the chances are high that a customer may have to pay a penalty. This amount may differ from bank to bank, and it may also depend on the type of account you have and the free services offered by the bank.
State Bank of India (SBI)
– No charge for not maintaining a minimum balance. SBI does not charge any penalty for not maintaining the minimum monthly average balance. These charges have been abolished in 2020.
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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: A balance of Rs 5,000 or a fixed deposit of Rs 50,000 is required.
– Penalty: 6% of the shortfall in average balance or Rs 600 (whichever is lower).
ICICI Bank
– Minimum Monthly Average Balance (MAB): Rs 5,000.
– Penalty: Rs 100 + 5% of the shortfall in the 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 location.
Yes Bank
– No charge for not maintaining a minimum balance.
– If the balance is more than 50% of the required balance: a 5% charge on the shortfall.
– If the balance is 50% or less of the required balance: 10% charge on the shortfall, or 5% charge for the Savings Value Account.
