Most banks lay down a condition that customers must maintain a minimum balance in their savings account. You can be penalized for not keeping the minimum balance. There is no limit on the penal charges that a bank will charge for the non-maintenance of the minimum balance. The charges have to be approved by the bank’s board. Charges will vary from bank to bank and from branch to branch as well. Penalty charges for branches in semi-urban and rural areas will be lower. Also, the charges will be higher for high net worth individuals and those whose shortage percentage in maintaining the balance is higher. For instance: A person who is 80 percent short of maintaining the minimum balance will be charged higher than a person who is 20% short of maintaining the minimum balance. But the main point involved in this is that banks do not penalize customers for not keeping the minimum balance daily. On the other hand, it is a monthly amount and is called the monthly average balance. 

How is the Monthly Average Balance Calculated?

The monthly average balance is calculated by adding up all the end-of-the-day closing balances and dividing it by the total number of days in the month. The total number of days will also include non-working days.

Let us take an example. Let us assume that the monthly average balance that should be maintained by an account holder is 2000. Then for the month of April, the sum of the closing balances at the month end is 2000 * 30 = 60,000.

If he maintains this amount in his account, he will not be penalized and will be if he fails to do so. It does not matter if he falls short of 2000 on some days. He can even deposit 60,000 in his account on the last day and avoid getting penalized. 

Guidelines to Maintain Minimum Average Balance

1)Open a Zero Balance Account 

Opening a zero balance account is very simple. You can just do it online and involve almost no paperwork. It takes very little time to do it. However, you may have to visit the bank or financial institution to get your KYC verification done. 

Additional Read: Zero Balance Account Through Pradhan Mantri Jan Dhan Yojana

2)Avoid Opening Multiple Accounts

It will be convenient to operate just one savings account instead of multiple ones. It will be easier to track a single account, and you can reduce the hassle of maintaining minimum average balance for all the accounts. You can use cash with ease instead of worrying about minimum average balance requirements. 

3)Set Auto-Sweep Options

Setting Auto-Sweep Options is the best and easiest way to maintain the minimum average balance in your savings account. You can link your fixed deposit account and savings account to enable funds transfer between the two. In this way, you can avoid the minimum average balance from going below the threshold value. 

4) Deposit as a Lump Sum

The fact that the monthly average balance is calculated for the entire month gives you a lot of flexibility. Say, your monthly average balance should be 90,000 but till the end of 2 days before the month closing, you are still at 80,000. You can always make a lump sum deposit of 10,000 and bring the end-of-month closing balance to 90,000. Thus by making lump sum deposits at any time in your savings account, you can meet the minimum average balance requirements.

5) Use Online/Debit Card/POS to Make Payments 

When you want to make payments, use your debit card or make a payment online on the required day. Because, if you withdraw money beforehand, you will lose the opportunity to earn interest on your savings account.  

Top Zero Balance Savings Accounts 

The following table lists out some top zero balance savings accounts in 2022 for Indian Citizens along with the interest rates:

Account Name 

Interest Rate 

State Bank of India BSBDA


IDFC First Bank Pratham Savings Account


IndusInd Bank Indus Online Savings Account





Standard Chartered Bank Aasaan


Kotak Mahindra Bank 811 Digital Bank Account


YES Bank Smart Salary Advantage



Maintaining the minimum balance in your savings account and making sure that you do not get penalized if you go below this minimum balance value is a bother. So, make sure that you open zero balance accounts. In this way, you will be able to use the funds in your savings account with ease and flexibility. Also, close inoperative accounts. Banks are not supposed to charge on non-operative accounts. But still, it is better to close them, since claiming back the money will be cumbersome. However, before closing the account, you should de-link all your investments, EMIs, credit card bill payments, and other automatic transactions with that account.

FAQS of dont keep the Minimum balance

  1. What are the consequences of not maintaining the minimum balance?

Customers have to maintain a minimum threshold amount in their bank account known as minimum average balance. If this value is not maintained, then banks charge a penalty from their customers.

  1. What is the meaning of minimum balance?

Banks require customers to maintain a minimum amount in their savings account. This is called the minimum balance. But this minimum balance is the minimum average balance, and it is a monthly value. 

  1. What are the advantages of no minimum balance?

No minimum balance means that you do not pay a penalty even if your account is empty. You can thus use the funds in your savings account without worrying about the minimum balance amount.

  1. How many bank accounts should a person have?

Having at least 2 bank accounts is ideal. He can have three utmost.

  1.  Are customers in SBI required to maintain a minimum balance on their savings accounts?

SBI, India’s largest bank, does not ask its customers to maintain a minimum  balance. 

  1. What is the minimum average daily balance?

Minimum Average Daily Balance is the minimum balance required to be maintained in your account to avoid penalties. The average daily balance is the total of all the end-of-the-day closing balances divided by the number of days in the month.

  1. Is it possible to withdraw money below the minimum balance?

If you have a savings account in a private sector bank, You can withdraw the entire funds at any time and can maintain zero balance.