To reflect the new minimum balance requirements, the Bank of Maharashtra, the Kotak Mahindra Bank, and the Axis Bank all amended their non-maintenance fees on August 1. Minimum balance requirements for Axis Bank and Kotak Mahindra Bank vary depending on the kind of account, but Bank of Maharashtra has upped its minimum balance requirement from $1,500 to $2,000. The bank now charges a penalty of up to 75 per month if a customer fails to maintain this amount in their account.
There is no longer a government exemption against banks imposing a penalty for failing to maintain a minimum average balance (MAB), thus many of us may be forced to pay a penalty if we let our account balance fall too low.
If you repeatedly fail to meet the minimum balance criteria set by your bank or if you just forget to do so, which results in you losing money, you could find that a zero balance account is exactly what you need.
One additional benefit of having a savings account is the possibility of having a zero balance, which is the case with the majority of salaried workers. On the other hand, you are able to create a personal account with no initial balance. Several financial institutions are now offering basic savings bank deposit accounts, often known as BSBD accounts, to customers who are not very wealthy in order to foster greater financial inclusion.
The primary advantage of zero balance accounts is that there is no minimum required balance to keep the account open. These accounts can be opened by meeting the know your customer (KYC) requirements. The monthly and quarterly MAB criteria are not necessary for a zero balance account because they are no longer applicable. In most cases, these are connected to the payroll account of an organization. You are able to open a stand-alone zero balance account, which does not need you to keep a minimum quantity of money in the account at any one time. BSBD accounts pay the same interest rate as conventional savings bank accounts, so you won't be missing out on that either.
While the functions of a zero-balance savings account and a standard savings account are identical, the facilities given by each bank vary." Also, these zero-balance accounts are frequently rudimentary, offering only the barest of essentials. For example, the account may have transactional restrictions. "The number of withdrawals per month may also be restricted," Shetty said.
In the case of the BSBD from SBI, for instance, you are restricted to a maximum of four transactions per month, regardless of whether you are withdrawing cash from ATMs or transferring money via electronic methods such as NeNeftRTGS, and so on.
Because they are intended to have "nono-frills BSBDs come with a more limited set of features than traditional savings bank accounts do; nevertheless, the specifics of these features can change depending on the financial institution.