Average balance in a savings bank account: 5 things to know (2024)

1.An account holder is required to maintain a certain minimum balance in his account over a certain period. This amount is termed as average balance.
2.Average balance is calculated as the sum of the daily closing balances for a period divided by the number of days in that period.
3.Banks classify different accounts and facilities that would be provided to their customers, based on the average balance maintained by the account holder.

4.Banks usually specify monthly, quarterly or half-yearly average balance requirements based on the type and location of account, and offer specific facilities to customers based on this.
5.Savings account holders are not bound to maintain average balance at all times. Normally, greater the facilities and services, higher the minimum average balance requirement.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.