Are you an SBI Savings Bank Account holder? If yes, this news is for you! Regarded as the Country’s largest lender, i.e. State Bank of India (SBI) recently gave this gift to its customers by announcing that there will be no requirement of holding a monthly average balance for all kinds of savings accounts.
Few months ago, SBI announced that the customers holding savings account are required to maintain a sufficient monthly average balance in their accounts. In addition to this, SBI has also specified different monthly average balances (MAB) for the accounts associated with different bank branches and will charge a penalty for non-compliance of the same. But after the recent announcement on March 11, 2020, all 44.51 crores savings bank account holders can enjoy the zero balance facility on their accounts. Apart from this, account holders don’t have to pay any kind of SMS charges that were used to charge on a quarterly basis.
What is the Revised Interest Rate on All Savings Bank Accounts?
After the recent announcement, SBI has also fixed the interest rate for all savings bank accounts as 3% per annum irrespective of the amount brackets. You can have a look at the below table to know more about the new interest rates.
|Amount||Interest Rate on Saving Accounts Before March 10, 2020||Interest Rate on Saving Accounts After March 10, 2020|
|Below INR 1 lakh||3.25% per annum||3% per annum|
|Above INR 1 lakh||3% per annum||3% per annum|
SBI Savings Account Maintenance Charges: Minimum Balance Rules Before the Recent Announcement
Talking about the different bank branches for determining the specific amount of penalty, State Bank of India has classified its branches into three types. These branches are: Metro, Semi-urban, and Rural. According to SBI’s website, if you are someone who is holding a savings bank account in a metro or urban bank branch, you need to maintain a monthly average balance of INR 3,000. Account holders in semi-urban SBI branches are required to maintain a balance of INR 2,000, while on the other hand, the customers in rural branches need to keep a monthly balance of INR 1,000. But after the recent announcement, there are no such rules for maintaining a MAB.
Penalty for Insufficient Balance
SBI has slashed charges for not maintaining average minimum balance in savings accounts. The new charges are effective since April 1, 2018. SBI savings bank account holders in metro or urban branches need to pay a penalty of INR 15 from the earlier INR 30-50 plus GST for non-compliance of the same. Earlier, the customers of metro or urban branch, completing a month with a monthly average balance shortfall of up to 50% (INR 1,500 – INR 3,000) were charged with an amount of INR 30 plus GST as a penalty. However, if the shortfall was between 50% and 75%, an account holder had to pay a penalty of INR 40 plus GST. While on the other hand, those with a shortfall of more than 75% had to pay a penalty of INR 50 plus GST.
Semi-Urban/Rural Branches: Customers holding savings bank accounts in these branches would pay INR 12 and INR 10 GST on not maintaining minimum average balance, much lower than the earlier charge of INR 40 plus GST every month.
For a better understanding, let’s get to the table below showing both the existing and proposed charges on non-maintenance of average monthly balance.
|Branch Locations||AMB Shortfall Range||Proposed Charges (Per Month)||Existing Charges (Per Month)|
|Metro & Urban|
Note – Applicable GST will be applied over the charges as stated in the table
ATM Cash Withdrawal Limit at SBI
India’s largest lender – SBI has reduced maximum cash withdrawal limit via ATM to 50% which means only INR 20,000/- per day. Until then, you can withdraw INR 40,000/- via ATM per day. The limit has been reduced to curb instances of frauds via ATM. Another purpose is to boost up digital payments since dispite so much given by the government towards digital transactions, India is not yet ready to become Digital India. As per the bank officials, most of the daily transactions are under INR 20,000/- so reducing the limit would not have much effect on customers.
SBI Cash Withdrawal Charges
The cash withdrawal from ATMs will also attract a charge of up to INR 20 if the number of transactions is more than 3 times from other bank’s ATMs in a month and INR 10 for more than five withdrawals from SBI ATMs. However, there will be no charges on withdrawals from the own ATMs of State Bank of India (SBI) within the maximum limit of INR 25,000. In addition to this, in the case of withdrawals by its customers from ATMs of other banks and there will be no charge if the balance exceeds by INR 1 lakh.
The bank has announced the charges on the closure of the savings bank account. Below are the details of the revised charges on the savings bank account closure.
SBI Savings Bank Account Closure Charges
|Period||Existing Closure Charges||Revised Closure Charges|
|Free look period - Up to 14 Days of Account Opening||NIL||NIL|
|After 14 Days up to 1 Year of Account Opening||INR 500 + GST||INR 500 + GST|
|Beyond 1 Year of Account Opening||INR 500 + GST||NIL|
|Account closed on settlement of accounts of deceased depositors||INR 500 + GST||NIL|
|Closure of Regular Savings Bank Account by BSBD Account holders||INR 500 + GST||NIL|
*The above charges are effective since October 1, 2019.
State Bank of India (SBI) has announced that the chequebooks, IFSC codes are invalid since September 30, 2017. This decision has been taken in lieu to SBI Merger with its five associated banks namely State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).