Minimum Average Balance: SBI vs HDFC Bank vs ICICI Bank - What banks charge as penalty

All the savings account holders are expected to maintain a certain minimum average balance. Banks too have rules in this regard, that is the average of net amount maintained by the account holder in a month divided by the total number of days in that month. The average has to be equal or more than the minimum balance requirement in regard to the bank savings account. In case of failure, banks levy penalty on customers.

Various Indian commercial banks such as SBI, HDFC, ICICI, etc have their rules in regard to minimum balance and penalty if a customer fails to maintain minimum monthly balance in his or her account. Let's take the SBI first, which is the largest Indian lender. As per the official website of the State Bank of India sbi.co.in, minimum monthly average balance required by its urban or metro customers is Rs 3,000 while its semi-urban and rural branches require to maintain Rs 2,000 and Rs 1,000 as a monthly average minimum balance. If a customer fails to meet this requirement, he or she will have to pay the penalty given below:

Source: SBI website

In case of HDFC Bank, the minimum monthly average balance required by an urban or metro branch is Rs 10,000 while in semi-urban and rural HDFC branches the minimum monthly average balance is Rs 5,000 and Rs 2,500 per month, says HDFC bank's official website hdfcbank.com. The official website of the HDFC bank further informs that in case of a rural branch, a customer can either maintain an average monthly balance of Rs 2,500 or a Fixed Deposit (FD) of Rs 10,000 for one year and one day. An HDFC bank account holder failing to meet these requirements set by the HDFC bank will have to face the penalty as follows:

Source: HDFC website

In case if ICICI bank customers, the categories are four instead of three. These categories are urban or metro, semi-urban, rural and gramin. As per the ICICI official website icicibank.com, for urban or metro customers the minimum average monthly balance is Rs 10,000 while for semi-urban, rural and gramin ICICI bank branches the minimum average monthly balance is Rs 5,000, Rs 2,000 and Rs 1,000,  respectively. If an ICICI account holder fails to meet the set guidelines for minimum average monthly balance, he or she will have to pay the penalty as follows:

Source: ICICI website

So, it is advisable for a bank account holder to keep a check on his or her bank account balance while withdrawing money from the account as maintaining the average monthly minimum balance is the must.