Banks charge customers a fee for not maintaining a minimum balance amount throughout a month in their savings accounts. This fee is called a minimum balance charge. The average minimum balance charge varies from bank to bank, but it is typically around Rs. 50 to Rs. 100 per month.
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How to avoid minimum balance charges
There are a few things you can do to avoid minimum balance charges:
Maintain a minimum balance in your account.
This is the most obvious way to avoid minimum balance charges. The minimum balance requirement will vary depending on the bank, so be sure to check with your bank to find out what it is.
Choose a bank that does not charge minimum balance charges.
Some banks do not charge minimum balance charges, so be sure to shop around and find a bank that is right for you.
Use a no-frills savings account.
No-frills savings accounts are typically offered by banks to low-income customers. These bank accounts generally have lower minimum balance requirements and lower fees.
Link your savings account to another account.
Some banks, though not all, allow you to link your savings bank account to another account, such as a credit card or even another checking account. If you do this, the bank will not charge you a minimum balance charge on your savings account, as long as the total balance in your linked accounts meets the minimum balance requirement.
Examples
Here are a few examples of how to avoid minimum balance charges:
Example 1
You have a savings account with Bank A, which has a minimum balance requirement of Rs. 5,000. If you do not maintain a balance of Rs. 5,000 in your account, Bank A will charge you a fee of Rs. 100 per month.
Example 2
You have a savings account with Bank B, which does not charge minimum balance charges. You can use your savings account with Bank B to avoid minimum balance charges at other banks.
Example 3
You have a savings account with Bank C, which has a minimum balance requirement of Rs. 1,000. You also have a checking account with Bank C, which has a minimum balance requirement of Rs. 2,000. You can link your first savings account to another account, namely your checking account or your credit card. If you do this, Bank C will not charge you a minimum balance charge on your savings account, as long as the total balance in your linked accounts is at least Rs. 3,000.
Minimum balance charges can be a pain, but there are ways to avoid them. By following the tips above, you can avoid minimum balance charges and save money.
