All banks, whether they are in the private or public sectors, require their clients to keep an average monthly balance (AMB) of a specified amount in their normal savings bank accounts. The AMB, however, varies from bank to bank.
The AMB also differs depending on whether a consumer has a savings account in an urban, metro, semi-urban, or rural area. Customers of the bank need to be aware that failing to comply with the AMB regulations may result in charges from the bank.
A high level of liquidity, financial security, and a fixed rate of interest are all features of a bank savings account. There is a minimum average balance that all holders of savings accounts must keep in their accounts. In addition, based on the required savings account balance amount, there will be a penalty if the same is not maintained.
What Is The Required Minimal Balance For A Savings Account?
To avoid paying the fees assessed by the bank, account owners are required to maintain a certain minimum balance limit set by the bank. Depending on the bank’s location, different banks have different minimum balance requirements.
What Is A Savings Account With A Zero Balance?
A growing number of banks now offer zero-balance savings accounts in place of the conventional practice of keeping thousands in the account to avoid penalties. According to the Bank of Baroda website, “a zero balance savings account is a 0 balance account where the account holder is free to operate the account without maintaining a minimum balance.”
These accounts typically include monthly restrictions on withdrawals and free transactions. If you exceed this amount on transaction value or withdrawals, the bank may impose additional fees depending on the nature of the transaction.
Popular Banks’ Minimum Balance
1. PNB Bank Minimum Balance
For PNB customers, the average monthly amount that must be kept in the account is Rs. 1000 for rural clients, Rs. 2000 for semi-urban clients, Rs. 5000, and Rs. 10,000 for urban and metro clients, respectively. Those in rural and semi-urban areas would be charged Rs 400 for not maintaining, while those in metropolitan areas will be charged Rs 600.
2. Canara Bank Minimum Balance
Customers of Canara Bank are required to maintain an average monthly balance of Rs. 2000 at urban/metro branches, Rs. 1000 at semi-urban branches, and Rs. 500 at rural branches.
3. SBI Bank Minimum Balance
SBI decided to discontinue its basic savings accounts’ Average Monthly Balance (AMB) requirement in March 2020. Before, depending on whether their branch was in a metro area, a semi-urban area, or a rural location, SBI account holders had to maintain an average monthly amount of Rs 3,000, Rs 2,000, or Rs 1,000 in their accounts.
4. ICICI Bank Minimum Balance
For regular savings accounts with the bank, the minimum average monthly balance is Rs 10,000 for metro areas. And Rs 5,000 for semi-urban areas, and Rs 2,000 for rural areas.
5. HDFC Bank Minimum Balance
Based on the AMB kept in the account in the prior month, HDFC Bank customers will be charged service and transaction fees in the current month. “It is mandatory to maintain a minimum average monthly balance of Rs. 10,000 or Fixed Deposit of Rs 1 Lakh for minimum 1 year 1 day period (w.e.f. 1st July’22) for urban branches, average monthly balance of Rs. 5000 or Fixed Deposit of Rs 50,000 for minimum 1year 1 day period (w.e.f. 1st July’22) for semi-urban branches,” according to the HDFC Bank website.