Many bank account holders for some reasons are unable to maintain the monthly average balance (MAB) in their savings bank accounts. In fact, there are a large number of account holders who do not maintain their monthly average or just forget to maintain the MAB balance in their savings bank accounts and get charged a hefty fine by their banks for it. If you like many are unable to maintain the monthly average balance in your account, or just don’t want to, there is no need to keep such an account active and pay fines on a regular basis.
To get rid of maintaining a minimum monthly average balance, opt for a zero balance account. With a zero balance account, account holders are not required to maintain any minimum average balance, unlike normal bank accounts. Salary accounts, that are opened by one’s employer, are usually zero balance accounts. Employees are not required to maintain minimum average balance with this type of account and no additional charges are added for non-maintenance of the minimum account balance.
If you are a non-salaried account holder, you can also opt for a zero balance account. This option is offered by most banks who do not require the account holder to maintain monthly average balance. However, the catch here is – the bank by themselves will not offer you the zero balance account. You as an account holder will have to ask for it. Almost all leading banks, starting from the State Bank of India (SBI) to ICICI Bank to HDFC Bank, offer the option of opening a zero balance savings account.
For instance, SBI’s Basic Savings Bank Deposit Account can be opened as a zero balance account, with no upper limit on the deposits that can be made. It offers an interest rate of 3.5 per cent for an amount up to Rs 1 crore and 4 per cent for Rs 1 crore and above.
Similarly, HDFC Bank’s Basic Savings Bank Deposit Account offers a free Rupay card to its account holders along with passbook facility, cash and cheque deposits at branches and ATMs free of cost, and four free cash withdrawals per month. IDFC Bank on their zero balance savings account offers 10 free withdrawals per month, along with various other benefits.
Note that, some zero balance accounts come with certain conditions like one needs to open a Fixed Deposit with the bank, which can range from Rs 50,000 to Rs 2 lakh, or opt for a mutual fund SIP of a certain amount per month.
Additionally, savings bank accounts such as Basic Savings Bank Deposit (BSBD) accounts, small accounts, pensioners, minors, Prime Minister’s Jan Dhan Yojna (PMJDY), and all social beneficiary accounts are exempted from maintaining the monthly average balance, as clarified by SBI. Hence, no charges are levied on them. Depending upon one’s eligibility and requirement, one can opt for any of these accounts.