What is “Below Minimum Account Balance” Charge?
This is a fee charged by banks when your bank account balance falls below the set minimum balance as per the terms and conditions of your account product.
How Does the Charge Work?
This fee may be charged monthly or whenever your account balance falls below the set minimum during a given month.
Example 1:
Suppose your account’s minimum balance is 100,000/-, and the below minimum balance charge is 10,000/- per month.
- If your balance drops to 95,000/- for even a single day during the month, the bank will deduct 10,000/- as a penalty.
- This charge also applies if your balance is below 100,000/- at the end of the month.
Example 2:
Suppose your account’s minimum balance is 100,000/-, and the below minimum balance charge is 10,000/- per instance.
- If your balance drops to 95,000/- for one day, you will be charged 10,000/-.
- If, later in the same month, your balance drops again to 50,000/-, you will be charged another 10,000/-.
- In total, you would pay 20,000/- in penalties for two separate instances during the month.
How Do You Minimise this Charge?
- Always read and understand the terms and conditions of your bank account, especially regarding fees and minimum balance requirements.
- Regularly check your account statements to ensure all charges are accurate. If you notice any unexpected fees or transactions, contact your bank branch promptly.
- Keep in touch with your bank for any updates or changes to product fees and charges.
Key Takeaways
- You may be charged a penalty if your account balance falls below the required minimum.
- Charges can apply monthly or each time your balance drops, depending on your account terms.
- To avoid these fees, know your account rules, monitor your statements, and stay updated with your bank.