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How to calculate Minimum Balance (MAB) in Savings Account?

Let’s know what is the Minimum Balance (MAB) math and how can we calculate it.

If there is no minimum balance in the bank account, State Bank of India (SBI or SBI) has earned crores of rupees from the fine. After this, the matter of Minimum Balance (MAB) has come up again in the discussion.

It is news that SBI is thinking about a change in the rules of Minimum Balance (MAB).

Let’s know what is the Minimum Balance (MAB) math and how can we calculate it.

In June 2017, SBI, the country’s largest bank, increased the minimum mandatory deposit in the savings account to Rs 5,000.

However, after strong opposition from the general public, SBI reduced it by Rs 3,000 in metro cities, Rs 2,000 in urban areas and Rs 1,000 in rural areas.

If you are an SBI customer and your savings account does not have this minimum amount, then the bank charges you.

For example, in the metro cities, the minimum deposit amount in SBI account is Rs 3,000 and if you have 75 percent of your account, that is less than Rs 750, you will be charged a penalty of 50 rupees and a GST.

Click here to know the MAB rules and penalties and charges for SBI Savings Accounts.

Most banks insist on maintaining MAB. As a savings account holder, it is important to know about your bank’s MAB. However, some banks have laid the limit of 1,000 rupees, so for some banks, this is Rs 5,000.

To avoid penalties, it is necessary to fulfill the mandatory minimum amount (MAB). However, it is also important to know as a customer as to how it is calculated. Learn how calculation of MAB on your savings account:

Monthly Average Balance (MAB)

Let’s say that your bank has asked you to maintain the average balance of Rs 5,000. We take the month of August for example.

On August 1, there are 4,000 rupees in your bank account. On August 12, you withdrew 3,000 rupees and 18 August.

This means that now your bank account has a total of Rs 10,000.

  • Accordingly, from 1 to 12 August (total 11 days) deposited in your account = (4,000×11) 44,000
  • August 12 to August 18 (Total 6 days) Deposit in your account = (1,000×6) 6,000
  • August 18 to August 31 (Total 13 days) Deposit in your account = (10,000×13) 1.3 lakh
  • 31 days Total Deposit = 1.8 Lakhs (44,000 + 6,000 + 1,30,000)
  • Average amount of 31 days = Rs 5806 (Rs 1.8 lakhs / 31)

This means that your average monthly balance is more than Rs 5,000, i.e.

you will not get any penalty from SBI. The calculation of your account balance is calculated based on the amount deposited by the end of the day.

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