We have all been there-one unexpected expense, an auto debit payment or simply forgetting to transfer funds and suddenly, your bank balance falls below the limit. Then bank gives us a pleasant surprise A penalty fee deducted from your account.
Banks charge customers when their account balance falls below the required minimum, but the amount varies depending on the bank and the type of account. Let’s break down how much these charges can be and, more importantly, how you can avoid them.
Why Do Bank Charge fees for low bank balance?
Bank impose minimum account balance requirements to encourage customers to maintain a certain amounts in their accounts. This helps banks ensure liquidity, reduce expense of the bank and in some cases generate revenue from the fees.
For the customers, these fees can feel frustrating when money is already tight. But understanding these charges can help you stay ahead and avoid unnecessary deductions.
How Much do bank Charges for Low Balance?
The charges for falling below the minimum balance depend on the bank, type of account and sometimes it depends upon your location.
Here are mentioned charges of Low Account Balance in major Banks of the India
- The State Bank of India(SBI) does not charge a penalty on low balance of saving accounts. If you use a SBI debit card and transaction is declined due to low balance you will have to pay Rs.20 plus gst for the transaction.
- The Bank of Baroda(BOB) charges as per different account and locations. In Urban or metro areas Rs.250 penalties for Low Account Balance and for rural area fees would be Rs.125 for the quarter.
- The HDFC banks charges as per account. In saving account if the balance is more than 50% but less than 100% the penalties would be 5 %.For rural branches the non maintenance charge for balance between Rs 1000 and Rs.2500 is Rs 270 per quarter.
- In ICICI bank if you fail to maintain the monthly minimum balance, you will be penalty 6% of the shortfall or Rs.500 whichever is lower.
- In Axis bank they charge in metro locations Rs.6 per 100 of the shortfall from the average balance requirement or Rs 600 whichever is lower.
- The Bank Of India(BOI) charge Rs.200 for the not maintaining the minimum account balance.
Ways to Avoid Low Account Balance Charges
- Choose a Zero Account Balance : Many Banks offer a zero balance account it does not require minimum balance.
- Keep Track of your Account Balance : On regular basis track your account for sufficient balance.
- Select the right Bank Account Type : As per a person income he or she should select a account type so after all expenses minimum balance should be remain in account.
- Maintain a Buffer Account : Always keep a little bit extra amount to avoid unexpected debits.
Low account balance charges can be a nuisance but it can be avoided with proper planning and financial discipline. Choose the right bank account, track your balance and to ensure you don`t incur unnecessary fees.
