In India, maintaining a minimum balance in your savings account is a common requirement set by banks. This rule mandates that account holders keep a certain amount of money in their accounts to avoid penalties. These rules and associated charges can vary significantly depending on the bank, the type of account, and the location of the branch. Here's a detailed look at the minimum balance rules of some of the top banks in India.

State Bank of India (SBI)

SBI, the largest public sector bank in India, generally does not require customers to maintain a minimum balance in their savings accounts. All savings bank accounts with SBI are zero-balance accounts.

HDFC Bank

HDFC Bank has different minimum balance requirements based on branch location. In metro and urban branches, the average monthly balance is ₹10,000. For semi-urban branches, this requirement is ₹5,000 or a fixed deposit of ₹50,000. In rural branches, customers must maintain an average quarterly balance of ₹2,500 or a fixed deposit of ₹25,000.

ICICI Bank

ICICI Bank recently revised its minimum balance requirements for new savings accounts. Following customer feedback, the bank set the minimum monthly average balance (MAB) at ₹15,000 for metro and urban locations, ₹7,500 for semi-urban areas, and ₹2,500 for rural branches. Previously, ICICI Bank had announced a minimum balance of ₹50,000 for metro and urban branches, but this was rolled back after criticism.

Axis Bank

Axis Bank requires an average monthly balance of ₹10,000 for all locations, including semi-urban and rural branches. Alternatively, customers can maintain a fixed deposit of at least ₹50,000 for a tenure of 12 months or more. For Priority Savings Accounts, the minimum balance is ₹2,00,000 per month across all branch types. Failing to maintain the minimum balance can result in a charge of 6% on the shortfall, up to a maximum of ₹600.

Other Banks

Many other banks, such as Union Bank of India and Kotak Mahindra Bank, also offer the option to open zero-balance savings accounts. These accounts do not require a minimum balance, providing a convenient option for customers who prefer not to maintain a specific amount in their account.

Importance of Maintaining Minimum Balance

Maintaining the minimum balance is essential to avoid penalties and ensure uninterrupted banking services. Banks charge a non-maintenance fee if the average balance falls below the required level. The average monthly balance (AMB) is calculated by summing the daily closing balances for each day of the month and dividing by the number of days in the month.

Zero-Balance Accounts

Zero-balance accounts, such as Basic Savings Bank Deposit Accounts (BSBDA) and Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts, do not require any minimum balance. While these accounts may offer fewer benefits compared to regular savings accounts, they still provide essential features like ATM cards and cheque facilities.

Factors Influencing Minimum Balance Requirements

Several factors influence the minimum balance requirements, including the bank type (public vs. private), the account type, and the branch location. Private banks typically have higher minimum balance requirements compared to public sector banks. Urban and metro branches usually require higher balances than semi-urban and rural branches.

Consequences of Not Maintaining Minimum Balance

If a customer fails to maintain the required minimum balance, banks impose a penalty. This fee is usually a percentage of the shortfall or a fixed amount, which can vary based on the bank's policies and the location of the branch. ICICI Bank, for instance, previously charged 6% of the shortfall or ₹500, whichever was lower, before revising its MAB norms.