When you open a savings account at a bank, you’re required to maintain a minimum balance. The specific amount can vary based on the type of account and the services provided by the bank. If you fail to maintain this minimum balance, the bank may impose a penalty.
These charges are imposed to cover the costs of maintaining and managing your bank account. According to a report, PSU banks have collected ₹8,495 crore in penalties over the past five years from customers who did not maintain the minimum balance in their savings accounts.
Although the State Bank of India (SBI) abolished these charges a few years ago, many other banks continue to impose them.
What is the minimum balance?
The minimum balance is the amount a bank requires you to maintain in your savings account. If your balance drops below this threshold, you’re likely to face a penalty. This required amount can vary between banks and may also depend on the type of account you have and the complimentary services offered.
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.
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.
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.