Understanding Minimum Balance Maintenance In Savings Account To Avoid Penalties

Savings Account offers the simplicity and convenience that customers need to deposit or withdraw money every single day. They allow you to enjoy the facilities that make one’s life convenient like paying bills and taxes online using net banking, saving on shopping or dining transactions using cashless cards, and enjoying secured fund transfers instantly using the IMPS facility. For such services, banks charge a fee. One of the fees associated with savings accounts is charges for non-maintenance of the minimum savings account balance.

How Minimum Balance In Bank Accounts Work?

Most banks in the private and public sectors want savings account holders to maintain a Monthly Average Balance (MAB) or a Quarterly Average Balance (QAB). The minimum amount to be maintained in a savings account can be Rs.5000-10,000. If the savings account holder could not maintain the minimum balance, they need to pay a non-maintenance charge for the month. 

Protect Yourself From Penalty with a Zero-Balance Savings Account

While most banks levy a fee on savings accounts if the minimum balance is not maintained, there is a solution to protect customers from such charges. Customers can approach a bank offering a zero-balance savings account. Some banks allow you to open a bank account online no minimum deposit requirement.

Reputable banks can waive off no minimum balance charges by changing the savings account’s status provided the customer meets the conditions laid by the bank. 

  • Customers can open a recurring deposit (RD) account or create a SIP (Systematic Investment Plan) to change the status of a regular savings account into a zero-balance savings account. The minimum amount for SIP and RD is Rs.2000. If the customer wants, they can invest more than Rs.2,000.
  • Individuals should know that this status conversion facility is available for digital savings accounts and women’s savings accounts. For such accounts, the bank will not charge any minimum account balance non-maintenance fee.

Continue reading the post to understand how digital savings accounts and women’s savings accounts are beneficial for customers. 

How a Digital Savings Account is Beneficial for Customers?

A digital savings account is a variant of a savings account. It is considered one of the best savings accounts with trusted banks as customers can open it online instantly using the applicant’s PAN (Permanent Account Number) and an Aadhaar card. Minimal documentation and video KYC (Know Your Customer) make the account opening process fast. 

The following are the advantages of a digital savings account.

  • Track Each Transaction: Using net or mobile banking, the account holder can check each debit and credit transaction. There is no need to wait in queues for an updated account passbook. 
  • Quick Fund Transfer: The fund transfer process for personal or business purposes is a matter of a few minutes using the UPI, IMPS, NEFT and RTGS. 
  • Virtual Debit Card: Get a virtual debit card for quick transactions online or at outlets. 
  • High-Interest Rate: The interest rate on a digital savings account can be as high as 6.5% with leading banks.

How Does a Zero-balance Women’s Savings Account Benefits Customers?

A women’s savings account is also a variant of savings accounts offered to women. It is a specifically designed account considering women’s differentiated financial needs. 

Also Read: What are the Consequences of Not Maintaining a Minimum Balance in a Bank Account?

Features of a Women’s Savings Account that can help women manage their finances without being independent of anybody are enumerated below.

  • Safe and Secure Banking: Robust technology makes account security systems safe. Account holders need not worry about the transaction made through the savings account. With two-factor authentication, the account is secured and can be accessed by the account holder only. 
  • Free Tax Payments: Women customers can save on services, like bill payments and tax payments. 
  • Easy Investing Process: Women who want to save and invest their funds can make it online. Invest spare funds in fixed deposits (FDs), recurring deposits (RDs), mutual funds and other financial assets online to add to their funds. 
  • Free Zero-balance Kid’s Savings Account: Banks allow customers to open a free savings account for their kids. 
  • Complimentary Insurance Cover: The account holders can benefit from the coverage of Transit Liability, Lost Card Liability, Air Accident Insurance, Personal Accident Insurance, etc., with the complimentary insurance cover. 

Zero Balance Account Opening with Video KYC 

Following are the steps for zero balance account opening with video KYC.

Step 1: Enter the Aadhaar and PAN details.

Step 2: Select a variant of the account.

Step 3: Provide personal information. 

Step 4: Schedule a Video KYC with the bank’s representative.

Following these simple steps, you can open a bank account online with no minimum deposit and save yourself from penalties. With leading banks, an executive salary account can also be opened as a zero-balance account.