India’s leading banks are in the news these days for levying hefty charges for non-maintenance of monthly average balance (MAB) in savings bank accounts. The State Bank of India (SBI) alone is reported to have collected a whopping Rs 1,771 crore during April to November 2017 as charges from below minimum balance accounts, while PNB collected Rs 97.34 crore and Central Bank of India collected Rs 68.67 crore as charges for non non-maintenance of minimum account balance.
However, if you find yourself unable to maintain monthly average balance in your bank account, then there is no point keeping that account active and keep paying fines on a regular basis. You have the option of opting for a zero balance account, which is being offered by many banks these days. You need to know that salary accounts are usually zero balance accounts as you are not required to pay any charge for non-maintenance of minimum account balance. And if you are not a salaried person, even then you can go for a zero balance account as there are many types of accounts which do not require the maintenance of monthly average balance.
Even SBI has clarified that savings bank accounts such as Prime Minister’s Jan Dhan Yojna (PMJDY), small accounts and Basic Savings Bank Deposit (BSBD) accounts, pensioners, minors and all social beneficiary accounts are exempted from the MAB requirement and no charges are levied on them. Therefore, if you wish, you can opt for any of these accounts depending upon your eligibility and requirement.
Besides, many banks are offering zero balance accounts these days in a bid to increase their customer base. For instance, IDFC Bank is offering a zero balance savings account which does not require any minimum balance and offers many benefits, like 10 free withdrawals per month, Visa Platinum Debit Card with a nominal fee, among others.
Similarly, Kotak Mahindra Bank is offering Kotak 811 zero balance saving account, which offers higher interest rate of up to 6% per annum. This is a digital savings account and can be opened by downloading the Kotak Mobile Banking App and registering your Aadhaar number, PAN and other basic details. It allows you to set up a mobile banking PIN and start using your account immediately. You need to be more than 18 years of age, and a resident of India with an Indian address to be eligible to apply for an 811 account.
HDFC Bank also offers Basic Savings Bank Deposit Account (BSBDA) which offers a free Rupay card to access your account, besides many other benefits like free passbook facility for all individual account holders, free cash and cheque deposits at branches and ATMs, 4 free cash withdrawals per month at branches, among others.
Yes Bank was also offering a zero balance account till 31st December, 2017. However, it came with some conditions, like you were required to make an FD of Rs 50,000 with the bank or opt for a mutual fund SIP of Rs 5,000 per month, among others.
Whatever be the case, you still have the option of opening a zero balance account if you find if difficult to maintain monthly average balance in your existing bank account. Don’t make your bank account your status symbol and keep paying hefty charges!