If you open a savings account in a bank, the bank requires you to maintain a minimum balance. This amount may vary depending on the type of account and the services offered by the bank and if you do not maintain this minimum balance, the bank may charge you a penalty. These charges are levied to recoup the costs of maintaining and managing your bank account.
What Is Minimum Balance?
The minimum balance is the minimum amount that a particular bank requires you to maintain in your savings account. If the amount in your account falls below the pre-decided threshold, the chances are high that a customer may have to pay a penalty. This amount may differ from bank to bank, and it may also depend on the type of account you have and the free services offered by the bank.
Why Do Banks Charge Minimum Balance?
Currently, banks provide many facilities like ATM, mobile banking and customer support. Banks also have to maintain their offices and pay their staff. Along with this, they also have to ensure that all digital services run smoothly. Therefore, the bank fulfills its needs by collecting various types of charges.
Many government banks have removed this minimum balance for customer convenience.
These include:
-State Bank Of India
-Punjab National Bank
-Indian Bank
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-Canara Bank
-Bank Of Baroda
Many private banks also force customers to manage minimum balance. Apart from this, several big companies tie up with banks. Under this, their salary account is opened in a certain bank. However, when the employee changes his/her company, another account is opened in a new bank. In this case, the previous salary account becomes a savings account.