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Home > Videos > What Is Monthly Average Balance | How Your bank Calculates Monthly Average Balance | IndianMoney.com

What Is Monthly Average Balance | How Your bank Calculates Monthly Average Balance | IndianMoney.com

If you are required to maintain the minimum balance in your bank account, do so without fail. If you do not, the bank would impose a penalty. In case of salary accounts or basic savings bank accounts, banks offer the zero-balance facility.

 

If you have a regular savings bank account, the bank considers the monthly average balance to compute interest and also penalty if minimum balance is not maintained. In this video, the speaker narrates the concept of the monthly average balance (MAB) with examples.

 

The monthly average balance is the minimum amount to be maintained in savings bank accounts each month to avoid paying penalties. It is computed by considering the average of the daily closing balance each month. Private sector banks impose a higher penalty compared to public sector banks; when accountholders fail to maintain the minimum balance.

 
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