Do you understand what is the
meaning of Minimum Quarterly Average Balance in
your saving account? When you say "Quarterly
Average Balance of your saving bank account is Rs
10,000″ , what does it mean
exactly? A lot of people feel that their
balance in saving bank account should not go below
Rs 10,000 on any given day, otherwise there will
be penalty charges and they make sure that they
have a buffer of Rs 10,000 in their saving bank
account all the time. This means that their
account always have that much surplus. However the
way quarterly average balance is calculated is
different and very simple.
Meaning of Quarterly Average
Balance ?
It simply means the average
of the all the closing day balance in a given
quarter. So given a quarter, add up all the
closing day balance and then divide it by the
number of days in the quarter. If you have to put
it as formula it would be
QAB = (Total of all the EOD
closing balance)/(number of days in
quarter)
Let me show you an example
. Let us say the quarter we are talking about
is Apr-June . Now your balance in the start of the
quarter (Apr 1) is Rs 20,000 . You withdraw 15,000
on 15th Apr and then Deposit 8,000 on 12th June.
What will be the quarterly average balance for the
Apr - June Quarter ?
Learnings &
Tips
- Keeping Rs 30,000 in a bank
account for 1 full month , is same as keeping
10,000 for full 3 months (30k * 30 days = 10k *
90 days)
- If you want to keep ZERO
balance in your account for most of the time,
then the best thing would be to put a big amount
like 90,000 for first 10 days of a quarter Q1
and then do a FD for 5 months , and then once it
matures, you will be in Q2 end , and then you
can put it for another 10 days , this way you
will meet quarterly balance for both Q1 and Q2
.
PSU Banks vs Private
Banks
A lot of PSU banks like SBI
bank, Bank of India , Allahabad bank generally
have a lowerQuarterly
Average Balance to be maintained in
saving bank account, it average limit is upto Rs
500 in most of the banks and non-Maintenance
Charges are very low around Rs 50-100 only.
However Private banks like ICICI Banks, HDFC bank,
Axis Bank etc have quarterly balance as high as Rs
10,000 and high charges as penalty for not
maintaining it , It some times can be as high as
Rs 750 . Note that ICICI Bank has
recently moved to Monthly Average Balance (which I
came to learn when I was writing this article and
thanks to everyone that I knew it as I have my
account in ICICI bank only)
Did you knew how the minimum
average balance is calculated ? Now will this
information impact your banking in any way ? Will
you keep less money in your bank account because
you now understand that quarterly average balance
is calculated in a different way than you
thought?
