In our previous article, we had given information on the maximum balance limit in the savings account. Many of our readers wanted to know that what is the minimum balance required to be maintained in SBI savings account? In this article, we will answer your question and also give some other useful information related to SBI Savings Account.
Minimum Balance Required in SBI Savings Account
In State Bank of India (SBI) savings account, it is no longer necessary to maintain any minimum balance. In March 2020, the bank had waived the penalty for non-maintenance of Average Monthly Balance (AMB) in all its savings accounts. However, for those with more balance, the bank increases the number of free transactions every month. For example, for customers having an average balance of more than 1 lakh, there is a discount for any number of transactions from the ATM.
Prior to that, (before April 2020), savings account customers were required to maintain a minimum balance in savings accounts. For not maintaining the minimum balance, a penalty of Rs 5 to 15 was also paid. Its rules were as follows-
|in metropolitan cities||3000 rupees|
|in small towns (semi-urban branches)||2000 rupees|
|In rural areas (rural branches)||1000 rupees|
The penalty for non-maintenance of SBI minimum balance was introduced from April 2017. For the preceding 5 years, there was no minimum balance penalty on SBI savings accounts. Again in April 2020, the requirement of minimum balance was abolished. Later, the bank also removed the SMS charges deducted on a quarterly basis, which were sent to alert the customer about the transactions taking place in the account. These rules apply to all types of savings accounts opened with SBI.
Types of SBI Savings Accounts
For general banking facilities, State Bank of India (SBI) offers the following 6 types of savings accounts.
|account name||Key Features of the Account|
|Basic Savings Bank Deposit Account||Low income earners can open with any valid KYC documents. There is no restriction on minimum and maximum balance, but check book is not available.|
|Basic Savings Bank Deposit Small Account||This account can also be opened without any valid KYC documents, but there are many restrictions attached with regard to maximum deposits and withdrawals. Such as-Maximum Balance: Can not keep more than 50 thousand balance.|
|savings bank account||The number of free withdrawals is fixed according to the average balance. Can be opened with valid KYC documents. Passbook and check book facility is available. 10 checks are available free of cost in a year. There is a charge for checks higher than this.|
|Savings Account for Miners (first step account And First Flight)||For children below 18 years of age, this account can be opened under two different names- Pehla Kadam and Pehli Udaan. The balance amount cannot exceed Rs.10 lakhs. But, checkbook is available, internet banking and mobile banking etc. can also be availed.|
The first step account is for children who cannot operate the account under their signature. Pehli Udaan account is for children who are operating the account under their own signature.
|Savings plus account||SBI Multi Option Deposit Scheme (MODSWhen deposits exceed a certain limit in this savings account, the excess deposit gets transferred to the Fixed Deposit (FD) account. On that additional amount, you get interest according to the FD account. At present this limit is Rs 35000. Every year 25 check leaves are available free.|
|Insta plus video kyc savings account||This account can be opened without going to the bank, sitting at home with the help of only Aadhar number and PAN card. The KYC process of the customer is completed with the help of video calls. Facility of ATM Card, NetBanking, Mobile Banking etc. is also available. Passbook is also available on sending the request.|
Even in these accounts of the bank, the minimum balance is not mandatory.
Before you get into the calculation of balance, it should be known that certain types of accounts are exempted from maintaining the minimum balance. Actually No-Frills Account, BSBDA Account opened in SBI will always be zero balance account. Apart from these, many other types of accounts also do not need to maintain a minimum balance.
- Jan Dhan Account
- basic savings account
- pension account
- Children’s account – first flight, first step
- Accounts receiving benefits of welfare schemes
- salary package account
- Account of students up to 21 years
Rest assured if your SBI account meets any of these conditions. You will not be penalized for not maintaining the minimum balance.
What is AMB or Monthly Average Balance?
After the instructions of the Reserve Bank, now the bank has the right to impose penalties on the basis of the average balance. Now it does not happen that on any one day of the month the balance came very low and the bank imposed a penalty. Rather now it is seen that what is the average of the balance living on each day of the month. If the average balance falls below the stipulated limit then only a penalty will be levied.
Process to calculate Average Monthly Balance
- Withdraw the balance of all the days of the month – Get End of Day balance of whole month
- Find the sum by adding the balance of all the days – Sum all the EOD balances
- Now divide the total by the total number of days in that month – Divide the Total with days in the month
- The result would be the Average Monthly Balance, whatever amount would be in the quotient
This formula to calculate the average balance has made it very easy for the customers. Because they have a chance to maintain the average balance.
Suppose someone has to keep an average balance of 3 thousand rupees but till the tenth day of April there is no money in his account. But his salary comes on the 11th. In such a situation, if he leaves only four and a half thousand rupees in the account till April 30 (20 days), then the average of three thousand will become for the month.