Many savings accounts require you to maintain a minimum or average balance, and charge fees for shortfalls and certain services. Knowing how these work avoids surprise deductions.
Key takeaways
- Most banks use Average Monthly Balance (AMB), not a daily minimum.
- AMB = sum of each day's closing balance ÷ days in the month.
- Shortfall charges must be proportionate to the shortfall (RBI guidance), and balances cannot go negative because of them.
- Basic Savings Bank Deposit (BSBD) and many salary accounts have no minimum balance.
How AMB is calculated
| Days | Closing balance | Total |
|---|---|---|
| 1–10 | ₹20,000 | ₹2,00,000 |
| 11–20 | ₹5,000 | ₹50,000 |
| 21–30 | ₹10,000 | ₹1,00,000 |
| AMB | ₹3,50,000 ÷ 30 = ₹11,667 |
If the requirement is ₹10,000, this month is compliant even though the balance fell to ₹5,000.
Common charges to check
| Charge | Typical rule |
|---|---|
| Non-maintenance of AMB | Slab or % of shortfall + GST |
| ATM transactions beyond free limit | Per transaction fee + GST |
| Cash deposits/withdrawals at branch beyond free limit | Per transaction |
| Debit card annual fee | Varies |
| SMS alerts | Some banks charge |
| Cheque book beyond free leaves | Per leaf/book |
How to avoid fees
- Choose the right account type for your balance.
- Set a low-balance alert.
- Use digital channels — NEFT/RTGS/IMPS online are low-cost or free.
- Convert idle accounts to BSBD or close them.
See our savings account guide.
Your action checklist
- Keep contact details and KYC updated with your bank.
- Add nominees to every account and deposit.
- Use online NEFT/RTGS/IMPS/UPI and verify the beneficiary name before paying.
- Never share OTP, PIN or CVV — banks do not ask for them.
- Review charges in your statement and switch accounts if fees are high.
FAQs
Can the bank make my balance negative with penalties?
No. RBI guidance says penal charges should not result in a negative balance.
Is a zero-balance account worse?
BSBD accounts have limits on some services but no minimum balance.
