Everyone has a bank account, through which they can conduct financial transactions and deposit savings. Minimum balance is the least amount of money you have to keep in a savings account to avoid charges.
The minimum balance that needs to be maintained in savings accounts depends on the bank. The amount is the lowest in rural branches and highest for metro cities.
If a person fails to maintain the minimum balance in their savings account, they may be subject to a penalty. Therefore, people often wonder if account holders with zero balance accounts are required to maintain a minimum balance?
Types of Savings Bank Accounts
All banks offer multiple types of savings bank accounts. Each account has different minimum required balance and interest rates. Here are a few most common types of savings bank accounts –
- Zero-Balance Bank Accounts
- Bank Accounts for Minors
- Bank Accounts for Women
- Bank Accounts for Senior Citizens
- Bank Accounts Without Cheque Books
Minimum Balance in Saving Accounts
In this blog post, we’ll explain in detail the minimum savings account balance requirements set by various banks so you can avoid penalty charges. So, let’s get started.
State Bank of India
SBI has eliminated the minimum balance limit for savings accounts. Previously, customers were required to maintain a minimum balance of Rs 3,000, Rs 2,000, or Rs 1,000. Now, you can maintain as much as you want, with no charges.
HDFC Bank
HDFC Bank customers are required to maintain a minimum balance in their savings account. However, the minimum balance limit varies between urban and rural branches. In urban areas, the minimum balance criteria is ₹10,000, while in semi-urban branches, the limit is ₹2,500.
ICICI Bank
ICICI Bank also requires maintaining a minimum balance in savings accounts. Customers must maintain a minimum balance of at least ₹10,000 in their accounts. Customers at semi-urban branches are required to maintain a minimum balance of ₹5,000. If you maintain less than this amount, you will incur a penalty.
Punjab National Bank
Punjab National Bank (PNB) customers are required to maintain a minimum balance of ₹10,000 in their savings account, ₹2,000 for semi-urban customers, and ₹1,000 for rural customers. If you’re opening a savings account with PNB, be sure to check the minimum balance limit.
Canara Bank
Canara Bank also sets a minimum savings account balance for its customers. Each account holder must maintain a minimum balance of ₹2,000. Rural account holders must maintain a minimum balance of ₹500.
What are the penalty charges for keeping less than the minimum balance?
Banks impose penalty charges for maintaining a balance below the minimum balance limit in any bank account. These penalty charges vary by bank. Therefore, it is important to be aware of these when opening an account.
Fixed Penalty Charges
Some banks charge a fixed fee for not maintaining a minimum balance. If your account falls below the minimum balance, you may have to pay a penalty. If the minimum balance is ₹1,000 and you only have ₹500 in your account, the bank may charge you a fixed amount, such as ₹10.
Monthly Penalty
Some banks charge a penalty for not maintaining a minimum balance on a monthly basis. For example, if you maintain a balance below the minimum balance for an entire month, the bank charges a fixed monthly penalty. After that, the charges are waived once you maintain the balance with your bank.
Fees vary by region
Along with national banks, regional banks also levy penalties, as they are located in rural areas. Penalty charges vary depending on this. Generally, charges are higher in urban areas and lower in rural areas. For more information, you can visit your rural bank.
Zero Balance account
If you are unable to maintain the minimum balance in your bank account, you can open a zero balance account. Many banks still offer zero balance accounts. If someone has opened a zero balance account, they are not required to maintain a minimum balance.
Why do banks maintain minimum balance limits?
The primary reason banks require minimum balance requirements is to reduce the cost of banking operations. Failure to maintain a minimum balance in their accounts results in significant losses for the bank. Therefore, banks have established this requirement for all customers.
Conclusion
The minimum balance requirement for a savings account depends on the bank and the account’s location. If your savings account is a zero-balance account, you don’t need to maintain a minimum balance.
