With the spread of the COVID-19 pandemic, people throughout the nation face financial difficulties, especially with wage cuts/ delays, no-pay, unemployment, delayed payouts, etc. Besides that when barely any money comes in, it has become difficult for people to maintain their minimum Monthly Average Balance (MAB). Account-holders who forget to maintain their MAB in their savings bank account get charged a hefty fine for it.
At one point, several account holders in the bank’s savings bank account cried about the non-maintenance of the monthly average balance. It’s not unusual if you owe your own money to the bank because of the inability to maintain the minimum account balance.
Whether you’re one of those who can’t keep the necessarily fixed sum in your account annually, or really don’t want to, there’s a way out. You don’t need to keep such an account active and continue to pay fines on a daily basis.
You should get rid of holding a fixed average monthly balance, and opt for a bank account with zero balance. Many banks sell this account with zero balance, but they will not come forward and give you this option. You have to ask the bank to apply for a checking account with the zero balance. Unlike regular bank accounts, an account holder with a zero balance would not be needed to maintain any minimum average balance.
Negative balance accounts are typically payroll accounts which the employer is opening. The workers are not expected to maintain a minimum daily balance for these accounts. No extra fees are paid to the account holder for the failure to maintain the minimum balance of the account. That said, if you leave the business or when the paycheck stops being credited to your bank account, after 3 or 5 months depending on the bank, you begin to get paid for MAB’s non-maintenance. Most people fall victim to this because this point is not normally addressed by the employer and most people are not aware of it.
You should opt for a zero-balance account to escape these circumstances. You can open an account with zero balance, even though you are a bank holder with a non-salaried account. With this option account holders are not expected to maintain an average monthly balance. Remember that the bank does not sell the zero balance account by itself; the customer will have to order it. Starting with ICICI Bank, IDFC Bank, from the State Bank of India (SBI) to HDFC Bank, nearly all leading banks offer this option of opening a zero balance savings account.
For starters, there is no upper limit on the deposits that can be made with SBI’s Basic Savings Bank Deposit Account (zero balance account). Likewise, HDFC Bank’s zero balance account gives the account holders a free Rupay card along with free passbooks, checkbooks, and ATMs. IDFC Bank offers its clients 10 free withdrawals a month on their zero balance savings accounts, along with numerous other benefits.
However, other banks have other provisions for holders of zero balance accounts. For example, some banks come up with some requirements, such as account holders need to open an FD with the bank, or opt for a SIP mutual fund of a certain amount per month to have a zero account balance. So first find out from your bank if there are any criteria to open a zero balance account.