Tag: Banking

Do you worry about maintaining the minimum balance in your bank account? If that’s the case, then you will be happy to know that now RBI has mandated all the banks to offer something called Basic Saving Bank Deposits Accounts where there is no minimum Monthly Average Balance (MAB) to be maintained.

Let’s know more about the BSBDA account.

You must have heard in the news that a few days back, Banks have collected approx Rs 11,500 cr from customers for not maintaining minimum balance limit. This situation happens with a lot of people. Through this article, we will see how we can prevent ourselves from getting into this situation.

Basic Saving bank deposit account – Meaning

The basic savings bank deposit account (BSBDA) is the zero balance bank accounts. This means you don’t need to maintain any kind of minimum balance limit in this account.

RBI has made it mandatory for all the banks to offer this service to people who are unable to maintain the minimum balance. Criteria to open this account are similar to the eligibility criteria of normal savings bank account. Banks may have their own criteria based on age or income.

However, as per the guidelines of RBI, banks are advised not to impose any criteria of age or income for opening BSBDA.

Features of Basic Savings Bank Deposit Account :

1. No minimum balance limit.
2. No limit for a money deposit.
3. The interest rate is similar to the regular savings account.
4. Normally there is no upper credit limit (these criteria may vary from bank to bank).
5. No minimum amount required for opening the account.
6. ATM cum Debit and passbook facility is provided totally free of cost.
7. Checkbook facility and online funds transfer facility is available.
8. No charges are applicable to any kind of transaction (within limit).
9. The account holder can open FD and RD.

Limitations of Basic Savings bank account

As I said earlier this is a zero balance account with no extra charges, but it has some limitations also :

• Only 4 withdrawals per month are allowed, including branch cash withdrawal, ATM withdrawal, NEFT, RTGS, online payment, EMI, etc.
• It depends on banks to either charge additional fees for extra withdrawal transactions or not.
• Your BSBDA will be converted into a normal savings account automatically if the transactions limit increases.
• Central KYC (A centralized KYC process to avoid submitting multiple KYC’s) should be done, otherwise, the account will be considered as a BDBDA-small account (explained below).

What is the Basic Savings Bank Deposit-small account?

This is an account that can be opened by a person who is above 18 years of age but does not have any official KYC document (Like Aadhaar Card, PAN or other ID proof and address proof, etc.). For this, a person needs to submit a self-attested photograph and he/she needs to sign the form and also provide thumbprints in the presence of bank officials.

The basic savings account of a person who doesn’t have a CKYC is treated as a basic savings bank deposit small account. Features of this account are as given below :

• This account is valid only for 12 months. It can be extended for the next 12 months by providing proof of having applied for officially valid documents.
• The balance should not exceed Rs.50,000 at any point.
• An aggregate of all credits in a financial year should not exceed Rs.1 Lac.
• Mobile banking facility may not be available.

Can I convert my existing savings account into a Basic Saving bank account?

There is no provision till date to convert existing savings account into BSBDA. You have to open a new BSBDA and for that, you need to close your existing savings account within 30 days of opening a BSBDA otherwise the bank will automatically close your earlier account after 30 days. A person can have only one BSBDA in a bank

Banks are restricted to offer any value-added services to the BSBDA account holders by charging any extra cost. If any extra service is given, then automatically the account will be converted to a normal saving bank account.

Documents required for opening Basic Savings Bank Deposit Account

Documents required for opening BSBDA are as follows :

1. Account opening form.
2. Colored passport-sized photograph.
3. KYC documents like – ID proof, address proof, PAN, etc.

Difference between a normal savings account and BSBDA

	Normal savings account	Basic savings account	Small savings account
Minimum balance limit	10000	No limit	No limit
Penalty if minimum balance is not maintained	Applicable	Not applicable	Not applicable
Withdrawal limit	Not applicable	Applicable	Applicable
Mobile banking facility	Available	May not be available	Not available
Credit limit	No limit	No limit	50000

Who should open this “Basic Savings Bank Deposit Account”?

Now you must be thinking “What is the use of this account for me? I have my regular account with unlimited transactions then why should I open a basic savings bank deposit account?

Let me tell you, there are lots of people around us who don’t have a bank account because they can’t maintain the minimum balance limit. Like some students, employees who have just entered into their profession, small-scale workers, maid, driver, and so many other people.

There are also some people who have more than one or two bank accounts other than their regular accounts. For these people, the money seems to be stuck in their bank accounts where they have to maintain the minimum balance limit.

Some senior citizens don’t require more bank transactions as they are either dependent on their children financially or they keep cash to avoid visiting banks or ATM’s every time for withdrawals when they need money. For such people, the basic savings bank deposit account is a good option to avoid the penalty and other extra charges for maintaining their bank account.

I hope this information was useful for you. If you have any query then write in the comment section.

Do you understand what is the meaning of Minimum Monthly Average Balance in your saving account? When you say “Monthly Average Balance of your saving bank account is Rs.10,000”, what does it mean exactly?

A lot of people feel that their balance in saving bank account should not go below Rs.10,000 on any given day, otherwise, there will be penalty charges and they make sure that they have a buffer of Rs.10,000 in their saving bank account all the time.

This means that their account should always have that much surplus. However, the way the monthly average balance is calculated is different and very simple.

Meaning of Monthly Average Balance?

It simply means that the average of the all the closing day balance in a given month. So given a month, add up all the closing day balance and then divide it by the number of days in the month. If you have to put it as a formula it would be

MAB = (Total of all the EOD closing balance)/(number of days in a month)

Let me show you an example. Let us say the month we are talking about is April. The minimum balance limit in your bank lets say is Rs.5000.

Now your balance at the start of the month (Apr 1) is Rs.10,000. You withdraw Rs.8000 on 10th Apr and then Deposit Rs.2000 on 20th April. What will be the Monthly average balance for the April month?

Learning’s & Tips

• Keeping Rs.10,000 in a bank account for 15 days is same as keeping 5000 for full 1 month (10k * 15 days = 5k * 30 days)

PSU Banks vs Private Banks

A lot of PSU banks like SBI bank, Bank of India, Allahabad bank generally have a lower monthly average balance to be maintained in saving bank account, it’s average limit is up to Rs.5000 non-Maintenance Charges are very low around Rs.40-50 only.

However Private banks like ICICI Banks, HDFC bank, Axis Bank etc have Monthly balance as high as Rs.10,000 and charges a high penalty for not maintaining it , It some times can be as high as Rs.750.

So by now, you must have known how the minimum average balance is calculated? Will this information impact your banking in any way? Will you keep less money in your bank account because you now know that Monthly average balance is calculated in a different way than you thought?.

Let us know if you have any query in the comment section.

Everyone wants to check bank balance and keep a track on their bank accounts. Smartphone’s, internet and banking system together has made this process easier by providing the facility to check your bank account details online.

But what in case of those people who don’t have a smartphone or internet connection?

Now you can check your bank balance and a few other details of your bank account without internet also.

Let’s see 2 methods of checking your bank balance when you do not have internet and also you want the information quick fast.

Method #1: Missed call feature to know your bank balance

This is a very simple process by which you can check bank balance easily without having an internet connection.

How does this process work?

As I said earlier, it is a very simple process which will be completed in just 2 simple steps.

• Dial the 10 digit mobile number which is allotted to your bank (Select from the list given below.)
• After 2-3 rings your call will be disconnected and you will receive a message which will show you your bank balance and mini-statement of last 5 transactions.

OR

• If your number is not registered to the bank, you will get an SMS which will show that your number is not registered with the bank and it will also include details of how to register your mobile number.

Given below is the list of banks and the 10 digit contact numbers which you can use to know your bank balance and mini-statements. You can simply save the related number of your bank in your contacts list and you can easily check your balance anytime.

Public sector banks and their contacts for missed call service:

 

Bank name	The contact number for missed call facility
Allahabad Bank	09224150150
Andhra Bank	09223011300
Bank of Baroda	09223011311
Bhartiya Mahila Bank	09212438888
Bank of India	02233598548
Indian Bank	09289592895
IDBI Bank	18008431122
Canara Bank	09289292892
The Central Bank of India	09222250000
State bank of India	For balance: 09223766666 For mini-statement: 09223866666
Syndicate Bank	09664552255
Punjab National Bank	18001802222
Union Bank of India	09223009292
UCO Bank	09278792787
Vijaya Bank	18002665555

 

Private sector banks and their contacts for missed call service:

 

Bank Name	The contact number for missed call facility
Axis Bank	09225892258
Dhanalaxmi Bank	08067747700
Kotak Mahindra Bank	18002740110
HDFC Bank	18002703333
ICICI Bank	02230256767
Karnataka Bank	18004251445
Yes bank	09840909000

 

Some salient features of this facility are given below:

1. This facility is completely free for everyone.
2. To get the benefit of this facility your mobile number should be registered with your bank account.
3. If you have more than one account, then your latest opened account will be considered as a default account and you will get the details of that account in this facility. However, the default account can be changed.
4. These features are the same for all banks. However, the process might be different in some of the banks.

Method #2: Know your bank account balance using *99#:

The code *99# is also called as USSD code which is not related to any particular mobile network service providers or any bank. This facility is introduced by NPCI to provide the facility to common people to have an easy access to their bank account.

Below given are the steps to check bank balance using USSD *99#:

• Dial *99# from your mobile.
• Select the option of bank balance from the list which will be opened on your screen (which is most probably 3 for all users).

 

• Then enter the 3 letter name of your bank or first 4 letters of your IFSC code.

OR

• It might ask your UPI pin if you are already registered for that.

• Enter 3 letters of your bank name (for e.g. SBN is the 3 latter name for State bank of India) or first 4 letters of your IFSC code (OR UPI pin).
• Your account balance will be shown on your screen.

Basic features of *99# service

This facility is a relief for those people who can’t have access to the internet all the time. This unique code has some basic features which you should know if you are going to use it.

The feature of this USSD code is as follows:

1. This code works without internet.
2. No hidden charges or roaming charges are applicable on use of this code.
3. It works across all the GSM service providers on all kinds of mobile handsets.
4. You can use this code 24/7 including holidays.
5. No need to download an app or activate any service on your mobile phone.

What kind of services you will get under *99#?

*99# is a USSD based mobile banking facility introduced by NPCI which brings together the two diverse ecosystem partners i.e. Banks and Telecom service providers.

Apart from the balance inquiry this banking system also provides some other facilities which are listed below. Let’s have a look at those facilities.

• Send Money Using IFSC code and bank account number of the beneficiary.
• Balance Enquiry
• Mini Statement
• Generate or change MPIN or Mobile PIN.
• Send Money Using Aadhaar number of the beneficiary which must be linked to his bank account.
• Know your MMID
• Send Money Using MMID and mobile number of the beneficiary.

The only difference between these two methods of mobile banking is that by using missed call service you can know your bank balance and mini-statement only.

On the other hand, if you go for USSD code service, you can also transfer money from your account to any other account by using his mobile number and MMID OR account number and IFSC code or even Aadhaar number.

Isn’t a very easy way to know your bank balance without any internet connection?

I hope you enjoyed the article. What do you think, is this facility helpful or not? Leave your opinions in the comment section.