5 benefits of maintaining a minimum balance in your bank account that will keep both your finances and CIBIL score in excellent shape..

If you have a savings account with any bank, you must have heard of the 'Average Monthly Balance' (AMB). While many banks have now eliminated the hassle of maintaining a minimum balance for their customers, some banks still follow this practice. This is why we often get annoyed when we receive messages from the bank saying our balance is low and we need to deposit money. We feel that the bank is just looking for an excuse to impose a penalty on us. But have you ever considered the benefits of maintaining a certain amount in your bank account?

Yes, maintaining an average monthly balance is not just a compulsion, but it can be a part of smart banking. If you maintain it properly, the bank offers you facilities for which others pay hefty fees. So, let's learn about the amazing benefits of maintaining your AMB that will make your life easier.

1. Freedom from Penalties and Heavy Fines

The first and most direct benefit is that your hard-earned money doesn't go towards penalties. Nowadays, different banks charge penalties ranging from ₹200 to ₹600 if the balance falls below the minimum requirement.

Smart Tip: Yes, if you maintain your AMB, you can save ₹2,000 to ₹5,000 annually simply by avoiding penalties. You can invest this money later.

2. Enjoy Free Checkbooks and ATM Transactions
Many banks always offer some extra facilities to their good customers. So, if your account balance is maintained properly, then:

ATM Transactions: The bank may increase the limit of free ATM transactions you receive every month.

Checkbook: Many banks provide one or two checkbooks free of charge annually. But if the balance is low, you might have to pay for each page.

DD and Pay Orders: The bank can also often offer significant discounts on the charges for issuing demand drafts.

3. Getting 'Free' Insurance
It's worth noting that this is a benefit that people often don't know about. Some banks offer complimentary personal accident insurance and air accident cover to customers who maintain a specific balance (such as ₹25,000 or ₹50,000).

Benefits: You don't have to pay any separate premium for this. Just maintain the required balance in your account, and the bank may provide you with insurance cover for free.

4. Getting Loans and Credit Cards Becomes Easier
Yes, when you apply for a home loan, car loan, or personal loan from a bank, the bank also looks at your 'repayment capacity'.

Bank's Trust: So, if you always maintain a good balance (AMB) in your account, the bank often feels that you are financially strong and can repay the money on time.

Pre-approved Offers: Banks may offer 'pre-approved credit cards' and 'instant loans' to customers with good credit without any documentation.

5. Premium Banking and 'Relationship Manager' Facility
If you maintain an average balance of ₹1 lakh or more in your account, the bank may categorize you as a 'premium customer'.

No Waiting: This means you don't have to stand in bank queues, and you get separate priority service.

Relationship Manager: The bank assigns you a personal manager who can handle all your banking-related tasks over the phone.

Airport Lounge Access: Many debit cards that are offered for maintaining a certain balance also provide free airport lounge access.

How is this AMB calculated?
This is where we often make a mistake. The average monthly balance doesn't mean that you need to have that amount in your account every day.

Example: Let's say your AMB is ₹10,000. So, if you keep approximately ₹20,000 in your account for the first 15 days of the month and maintain a zero balance for the next 15 days, your average balance will still be considered around ₹10,000. This means you can withdraw and deposit money according to your needs, as long as the monthly average is maintained.

Maintaining a balance is not a loss, but an investment.
It's important to know that maintaining a minimum balance in your bank account is not just a bank rule, but also beneficial for your own financial health. It not only helps you avoid unnecessary expenses but also improves your creditworthiness in the eyes of the bank. The next time you receive a message about maintaining your balance, consider it an opportunity to maintain your benefits, not a threat of penalties. (Note: This information is for general knowledge only; please contact your bank for more details.)

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