InvestorQ : Is there any way an individual can easily maintain his/her bank account’s monthly average balance?
Ishita Jain made post

Is there any way an individual can easily maintain his/her bank account’s monthly average balance?

Answer
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Anusha Savla answered.
1 year ago


Most banks – private and public alike- charge their customers minimum average balance (MAB) these days. The monthly average balance means the average of the all the closing day balance in a given month. So given a month, add up all the closing day balance and then divide it by the number of days in the month. If you have to put it as a formula it would be

MAB = (Total of all the EOD closing balance)/(number of days in a month)

If a customer doesn’t comply with the monthly/quarterly average balance (MAB) rules, then he/she will be charged a penalty.

If a customer has a priority bank account then his/her MAB requirements would be significantly higher than a normal savings bank account.

However, it isn’t all that difficult to maintain one’s monthly average balance. According to Adhil Shetty, CEO, BankBazaar, here are a few easy ways to maintain your monthly average balance:

1) Avoid having multiple accounts, as the MAB rule is different for different banks and it’s often hard to keep track. Also, you would be blocking a lot of cash just to maintain the MAB in those accounts.

2) You can maintain the MAB tactfully. Say, your monthly average balance requirement is Rs 5,000. You can either maintain that closing balance every day or have Rs 1,50000 on a single day. It means the same.

3) The MAB requirement is lower for public sector banks compared to private sector banks. So, opening an account with a private sector bank would reduce your burden.