Failing to maintain minimum balance in bank account? Save yourself from penalty, do this
Most banks require their customers to maintain a minimum balance in their account. They charge their account holders for the non-maintenance of minimum average balance (MAB). Yes, the government had given a waiver on this till the end of June, but, that period is over.
Most banks require their customers to maintain a minimum balance in their account. They charge their account holders for the non-maintenance of minimum average balance (MAB). Yes, the government had given a waiver on this till the end of June, but, that period is over. Following this. Bank of Maharashtra, Kotak Mahindra Bank and Axis Bank have revised their charges for non-maintenance of minimum balance effective August 1.
While Axis Bank and Kotak Mahindra Bank will charge a penalty based on the type of account if the account holder fails to maintain the minimum balance, Bank of Maharashtra has announced that its minimum balance requirement has been increased from Rs 1,500 to Rs 2,000.
If customers fail to maintain this balance, they will have to pay a penalty of up to Rs 75 - every month! However, there is one way through which you can avoid this penalty, if you forget to maintain minimum balance.
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The way out is to switch to a zero balance savings account. If you are a salaried employee, you probably already have a zero balance savings account. The advantage here is that you don’t need to maintain a minimum balance in this case. For those unaware, you can also open a zero balance account for personal use. These are called basic savings bank deposit (BSBD) accounts and most banks offer these as a way to increase financial inclusion among the economically weaker sections of the society.
To open this account, you simply need to complete the know your customer (KYC) formalities. Most banks offer a zero balance account where the MAB you need to maintain on both a monthly and a quarterly basis is zero. The best part is that you continue to enjoy the same interest rate on BSBD accounts as on regular savings bank accounts.
This of course, comes with some limitations. For example, if you want to open a zero balance savings account with SBI, you will not be authorized to hold any other savings bank account with the bank. In case you already have an account, you will be required to close it.
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