What Happens if Minimum Balance is not Maintained ?

One of my friends just cashed all of the remaining funds from his savings account because he required the money. However, he neglected to maintain the standard minimum balance in his HDFC account on the final day. He then questioned me about what if minimum balance is not maintained in the account. So, I checked on the internet and found that financial organisations commonly mandate that a bank account keep a certain minimum balance. There are a number of implications if this minimum balance is not maintained. 

What if we don't maintain minimum balance?

Check out the replication of maintaining a minimum balance below:

• The account holder may be fined a penalty fee by the bank as already mentioned by Vanshika above. When I searched online for my friend, I found that the penalty for an urban branch account with a minimum balance of less than 2,500 is Rs 600. However, the fee for an account less than 10,000 but more than 7,500 is Rs 150.

• The account holder might no longer be eligible for several advantages that are often associated with keeping a minimum balance. 

• The bank may even shut the account if the balance remains below the minimal requirement for an extended period of time.

Atul has provided the penalty charge for not maintaining minimum balance at SBI, ICICI, and RBL Bank. Moreover, account holders who fail to keep a monthly minimum balance of Rs 10,000 in metro areas and Rs 5,000 in non-metro areas will be charged 6% of the shortfall by Kotak Mahindra Bank. I hope this answer is helpful to you.

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The charges for not maintaining minimum balance may result in the imposition of penalty charges or fees by the bank. Here's what typically happens if the minimum balance is not maintained:

• Banks usually charge penalty fees if the minimum balance requirement is not met. These charges vary from bank to bank and may be deducted directly from the account balance.

• The bank may notify the account holder through SMS, email, or physical mail if the account falls below the minimum balance threshold. This notification serves as a reminder to replenish the account balance to avoid penalty charges.

• If the account remains below the minimum balance requirement for a specified period (usually a monthly average), the bank will deduct the penalty charges from the account balance. These charges can reduce the available funds in the account.

• Banks often have mechanisms in place to monitor account balances regularly. If an account consistently fails to maintain the minimum balance, the bank may contact the account holder to discuss options or provide guidance on avoiding penalty charges in the future.

• In extreme cases where the account remains dormant or consistently fails to maintain the minimum balance despite notifications and penalties, the bank reserves the right to close the account. This typically happens after providing due notice to the account holder.

• Continuous failure to maintain the minimum balance and incurring penalty charges may affect the overall banking relationship with the institution. It could lead to restrictions on accessing certain services or impact eligibility for certain banking products in the future.

I hope you get an idea of what happens if minimum balance is not maintained.

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As a banker, I understand the importance of maintaining a minimum balance in your bank account. The minimum balance is the minimum amount of money that you need to keep in your account to avoid any charges or penalties. I have checked online, let me tell you the penalty for minimum balance in SBI.

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What happens if you go below minimum balance?

If you go below the minimum balance in your account, you will be charged a penalty or a fee for non-maintenance of the minimum balance. The charges for non-maintenance of minimum balance vary from bank to bank. For example, at RBL Bank, if you fail to maintain the minimum balance, you may be charged a penalty of Rs. 500 to Rs. 750 per month.

Similarly, at State Bank of India (SBI), the charges for non maintenance of minimum balance is now waived off w.e.f 11.03.2020. Earlier on, the penalty was Rs. 5 to Rs. 15 per month. At HDFC Bank, the charges for non maintenance of minimum balance is  Rs. 150 to Rs. 600 per month, depending on the account type and the location of the branch.If you have a savings account in a metro city, I would suggest you maintain a minimum balance of Rs. 10,000 to Rs. 25,000.

Charges for non maintenance of minimum balance in ICICI Bank ranges from Rs. 100 to Rs. 600 per month. For Axis Bank, the penalty for non-maintenance of minimum balance can range from Rs. 250 to Rs. 500 per month. RBL bank minimum balance charges range from Rs. 350 to Rs. 1000 per month.

It's always a good idea to read the terms and conditions of your account carefully to understand the penalty for minimum balance in SBI.

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In my experience, most banks in India have a long list of conditions that need to be met by the customers. Having a minimum balance in the account is one of them. I have daydreamed about spending that money and taking my account balance to NIL. I will tell you what will happen if minimum balance is not maintained. Pay You Water/Electricity/Piped Gas Bills via NoBroker and Get Assured Cashback! Get home loans at the lowest interest rate from NoBroker and avoid hefty paperwork What happens if minimum balance is not maintained? If the minimum balance is not maintained then, the account holder is penalised. A fee will be incurred for the non-maintenance. Usually, the charges vary from bank to bank, even branch to branch. Though, the banks don't penalise the account holders for this every day. It only happens Month end ke time when the monthly average balance is calculated. Those who have high net worth are charged more in comparison to those who don't. This fee is also known as the non-maintenance of funds fee. The non-maintenance fee is higher for accounts in urban areas than in semi-urban and rural areas. The fee details are given below.

Area	Fee
Metro/urban	Rs. 350 or Rs. 5 for every 100 rupees shortfall whichever is lower
Semi-urban	Rs. 350 or Rs. 5 for every 100 rupees shortfall whichever is lower.
Rural	Rs. 750 or Rs. 5 for every 100 rupees shortfall whichever is lower every 6 months.

This is all from my end on what happens if minimum balance is not maintained. Read more : can bank charge for not maintaining minimum balance how much fine for not maintaining minimum balance in sbi What is the minimum balance in Indian bank ? How much HDFC Charges for Not Maintaining Minimum Balance?