Monthly Average Balance: Importance, Impact & Benefits

Learn what is MAB and DBS Bank MAB requirements.

Key Takeaways

MAB stands for Minimum Average Balance or Monthly Average Balance.
It is the minimum amount you must maintain in your Savings Account all the time.
Different banks have different MAB requirements, which may also vary based on the type of Savings Account.
You can maintain your MAB by maintaining fewer instead of multiple accounts and making lump sum deposits.
DBS Bank offers Savings Accounts with a nominal MAB requirement of only INR 10,000.

A Savings Account is usually the first account you open with a bank. It enables you to deposit your idle funds and earn interest on deposits. You can use funds in the account to make payments, open Fixed and Recurring Deposits, initiate fund transfers, and so on. Your bank also mentions the terms and conditions for keeping the account operational all the time. One such requirement is maintaining the Monthly Average Balance or Minimum Average Balance. To learn what is MAB and DBS Bank minimum balance requirements, continue reading.

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What is Minimum Average Balance?

Minimum Average Balance (MAB) is the minimum amount of money you must maintain in your Savings Bank account at all times. It is usually a fixed sum that differs from one bank to another. The MAB required by a bank typically depends on the type of account you open. It is usually lower for regular accounts with PSU banks but may be significantly higher for privileged accounts offered by public sector banks.

Banks have to bear a cost to manage and maintain your Savings Account, which is why they ask you to maintain a Monthly Average Balance (MAB) in your account. Failure to do so may result in penalties. Usually, MAB is calculated by dividing the closing balance present in your account each day by the number of days in a month.

How Can You Maintain MAB?

Avoid Opening Multiple Accounts

Avoid opening more than two or three Savings Accounts to easily access your funds without having to worry about excessive MAB requirements. With fewer accounts, the MAB balances will not block your funds, and you will not have to bother with tracking the MAB required by each bank.

Make Lump Sum Deposits

If your MAB requirement is Rs 10,000, then you can maintain a closing day balance at Rs 20,000 for 15 days, and your average will remain the same. Since MAB is calculated on a monthly basis, you can use clever tactics to maintain the average.

Withdraw Funds Intelligently

Try to make payments using your debit card on the requisite day, or at POS or online. When you withdraw money in advance, you lose out on the opportunity to earn interest on the balance present in your Savings Account.

DBS Bank Minimum Balance Requirements

DBS Bank offers various Savings Accounts designed to meet your different needs. With a Savings Account in DBS Bank, you can enjoy competitive rates of interest and facilities like debit cards, domestic and international fund transfers, etc. The DBS minimum balance required on a Regular Savings Account is only INR 10,000.

Final Note

With the DBS Bank Savings Account, you can enjoy a world of privileges along with lower monthly average balance requirements. With Online Savings Account opening and mobile banking facilities, you can conveniently access your account anytime.

With DBS Bank app, you can open a new savings account in a few minutes! Download the app to get started.

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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.