Minimum Balance Penalty Charges in India 2025: Bank-Wise Comparison & Rules

What You Need to Know (Before You Get Penalized)

The thing with the saving accounts is that they are not free of obligations; one of the obligations is that you maintain a balance. Otherwise, your bank may impose on you a penalty. Nevertheless, to what extent? Does all banks cost the same? What is the right of customer? Now let us reduce it all to simplest terms.

What Is Minimum Balance Requirement?

Banks will require that you maintain minimum average balance (MAB) to make your savings account active. It is either quarterly or monthly calculated. In case this limit is exceeded, what happens is that a penalty is charged.

Example:

• Assuming that your MAB is 10 thousand and average monthly balance is 6 thousand, then you have to pay 100-300 rupees by bank depending onto the bank.

Why Do Banks Charge Penalties?

Banks subsist infrastructures, service interest, operate millions of accounts. They depend on the constant stream of deposits in order to lend and operate. Minimal balance requirement assists:

• Ensure steady funds for the bank
• Cover administrative costs
• Encourage responsible banking habits

Bank-Wise Minimum Balance Penalty Charges (2025)

Here’s a snapshot of what major Indian banks are charging this year for non-maintenance of minimum balance:

Note: Charges may vary based on account type and branch location (urban/rural). Always confirm with your bank.

Bank	Min. Balance Required	Penalty Charges (Monthly)
SBI	₹1,000–₹3,000	₹10–₹15 (rural), ₹30–₹50 (urban)
HDFC Bank	₹10,000 (urban)	₹150–₹600 (based on shortfall %age)
ICICI Bank	₹10,000 (urban)	₹100–₹500 (slab-wise)
Axis Bank	₹12,000 (urban)	₹50–₹600 (based on shortfall %age)
Kotak Bank	₹10,000 (urban)	₹50–₹500
Yes Bank	₹10,000 (urban)	₹150–₹750
BOB	₹2,000–₹5,000	₹100–₹300
PNB	₹500–₹2,000	₹50–₹200
IDFC FIRST	₹0 (some accounts)	No charges for zero balance accoun

How to Avoid Minimum Balance Penalty Charges

Here are some easy, practical ways to skip those annoying penalties:

✅ Tips to Stay Penalty-Free:

• Automate Transfers: Set up auto-transfers to maintain balance.
• Use Digital Wallets Carefully: Avoid draining your bank account via UPI or apps like PhonePe.
• Set Alerts: Use SMS/email alerts when your balance drops.
• Switch to Zero Balance Account: If you’re not able to maintain a balance, consider zero-balance options.
• Check Statements Monthly: Avoid surprises by reviewing your bank balance often.

RBI Rules on Minimum Balance Charges

The Reserve Bank of India (RBI) has set some clear rules for banks:

• Transparent Disclosure: Banks must inform customers in advance about penalty charges.
• Fair Charges: Penalties should be reasonable and not punitive.
• Monthly Notification: Customers must be notified every month if the balance is below the required level.
• No Charges on Basic Accounts: Basic Savings Bank Deposit Accounts (BSBDAs) or zero balance accounts cannot be penalized.

✅ As per RBI Circular: Penalties must be proportionate to the shortfall and disclosed upfront.

Customer Rights You Should Know

• You have the right to full disclosure of all charges.
• You can switch your savings account if you feel the charges are unfair.
• You are entitled to a grievance redressal system within the bank.
• You can request for waiver (especially in case of financial hardship).

Zero Balance Accounts: A Better Option?

Yes! If maintaining a balance is difficult, opt for:

• BSBDA (Basic Savings Bank Deposit Account)
• Salary Accounts (if eligible)
• Digital Savings Accounts like from IDFC FIRST or Kotak 811

👉 Read: Best Zero Balance Savings Accounts 2025

Conclusion

Minimum balance penalty charges can be a silent drain on your hard-earned money. But with awareness and smart banking, you can avoid them completely.

✅ Keep track of your average monthly balance
✅ Use SMS and app alerts
✅ Switch to a zero-balance account if needed
✅ Know your rights under RBI guidelines

👉 Check your bank’s policy now
or
🔍 Use our free Balance Checker Tool to avoid penalties!

FAQs on Minimum Balance Penalties

❓ What happens if I don’t maintain the required balance?

Your bank will deduct a penalty, usually every month. It can range from ₹10 to ₹750 depending on the bank and shortfall.

❓ Can I switch to a zero balance account?

Yes. Most banks offer zero balance accounts under specific schemes like BSBDA or salary accounts.

❓ Will my account be closed if I keep getting penalties?

If penalties continue for months and the balance stays negative, the bank may freeze or close your account after warning.

❓ Are there accounts with no penalty at all?

Yes, digital banks and BSBDAs are designed for people who don’t want to maintain minimum balance. No penalties are charged.