What happens if minimum balance is not maintained ? (2024)

FAQs

What happens if minimum balance is not maintained ? ›

Minimum balances can be enforced by charging fees, denying interest payments, or closing the account if the 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.

The Bank may impose and collect service charges and/or maintenance fees on Accounts, whether active or dormant, where the Account balances: (i) have fallen below the required minimum monthly ADB, for dormant accounts; and (ii) have fallen below for at least two (2) consecutive months, for active accounts.

For instance, you may be hit with a monthly maintenance fee if your balance falls below the minimum. Or, you may need to keep a minimum balance to earn a certain amount of interest.

The Bank reserves the right for further issuance of Cheque books, Statements, Fed mobile pins, Fed Net pins, Debit/ATM Cards & PINs to the customer, in case the Average Monthly/Quarterly Balance in the Account is not maintained.

An overdraft fee of about $35 may be assessed when you go into the negative balance territory. Or the bank could also decline the transaction and charge you a non-sufficient funds (or NSF) fee. This is sometimes called an insufficient funds fee, and it is typically the same amount as the bank's overdraft fee.

If your account contains no money, the bank might close it. Simply because an account says there are no minimums, does not mean the account should remain empty for days or months. The time frame will vary based on your individual bank and its practices.

If you overdraw your checking account, the bank can pull funds from your savings to cover the shortage, as long as you have enough funds available. Your bank may still charge you a fee for transferring the funds automatically, but it is typically less than an overdraft charge.

How long do banks give you to pay overdraft fees before closing your account? Usually 30 days. Banks don't like you to overdraft your account, that's why they charge high fees.

Most traditional banks require you to maintain a minimum account balance to avoid monthly service charges. These typically range from $100 to $2,500, though most are much closer to the lower end.

Is it okay to have 0 dollars in checking account? ›

In some cases, a $0 checking account balance will result in fees. If you use your checking account for a purchase when your balance is $0, you may be hit with overdraft fees.

The idea is simple - you can open a Savings Account, but you don't have to maintain a minimum balance in it. As the name of the account implies, this is a zero-balance account. Therefore, you don't have to maintain a minimum balance. Consequently, there is no penalty in the case of zero balance.

The Axos Bank Rewards Checking account offers a winning combination of features. There's no monthly maintenance fee or minimum balance requirement. and the bank provides unlimited reimbursem*nts for domestic out-of-network ATM charges. Axos doesn't charge a non-sufficient funds fee either.

If you don't have sufficient balance in your savings account to deal with unexpected expenses, it can affect your credit score. This will especially be noticed when you use your credit card to make debt payments instead of using a savings account balance.

If you're carrying a balance on your credit card, the card issuer typically calculates your minimum payment each month as a percentage of what you owe — and that figure will rise if you're charging more to the card each month and growing the balance.

If a bank has a minimum balance policy, it is mandatory to follow it. On failing to do so, a penalty will be charged by the bank.

Making timely payments towards utility bills and maintaining a low balance in comparison with the credit limit can directly impact the customer's credit score. However, lenders can get a good amount of information by merely keeping an eye on the manner in which you make your payments towards credit card bills.

Regular savings account holders are required to keep a minimum average balance on a monthly basis. This average monthly balance (AMB) limit is determined by the customer's location (rural, urban, semi-urban, and metro) as well as the various types of savings accounts that the banks provide.