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What is a Minimum Balance? – MyFinanceInsurance

by Shagun Saini
what is a minimum balance

Here we study what is a minimum balance? And why it is necessary to maintain a minimum balance. And also study about the minimum balance for a savings account, and other requirements of maintaining a minimum balance, with some of the banks having no minimum balance and some with a low minimum balance.

What is a Minimum Balance?

The minimum balance refers to the minimum amount of dollar that customers hold in their account, which provides them with some benefit of keeping their account open or receiving interest. Therefore, the minimum balance is the minimum amount of $ that should be maintained within a bank account.

So, the minimum balance definition is the minimum dollar amount an individual holds up in their account.

Other than the minimum balance of a bank account, there also exists a minimum balance for margin accounts, which is the minimum deposit that should be done before margin trading, and after a stock is purchased.

If no minimum balance is maintained then this can levy certain charges, fees, or in some case closure of the account. Although there are no certain rules as the minimum balance is compulsory, it may depend upon the different banks.

So, not all banks require minimum balances, and there exist ways in which you can avoid a minimum balance of the account or open a $ 0 balance account such as opening up of a student’s account.

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Related Terms With Minimum Balance:

Some common terms and words used with minimum balance are as:

  • Minimum Balance For Savings Account

Banks generally charge no minimum balance or a low minimum balance to be maintained. Here, we mention some of the banks offering no minimum balance or a low minimum balance such as:

BanksAPYMinimum balance
American Express® High Yield Savings Account0.60 % $ 0 minimum balance
HSBC Direct Savings0.50 %$ 1 minimum balance
FNBO Direct Online Savings Account0.60 % $ 1 minimum balance
Nationwide My Savings0.40 %$ 0 minimum balance
Discover Bank Online Savings0.60 % $ 0 minimum balance
Barclays Online Savings Account0.60 % $ 0 minimum balance
  • Minimum Balance Charge

A minimum balance charge is a charge levied by the bank or institution for not maintaining the minimum amount in your account. It could be in terms of frees, interest charges, or even closure of your account.

  • No Minimum Balance

A no minimum balance means denotes that there are no fees levied even if you do not have any balance in your account or your account is empty.

  • Minimum Balance For a Checking Account

You need to have $ 100 to $ 2,500 to meet the minimum balance requirement. Where some of the traditional offline banks require maintenance of a minimum account balance to avoid monthly service charges.

Frequently Asked Questions

  • What is a minimum balance charge?

A minimum balance charge is a charge levied by the bank or institution for not maintaining the minimum amount in your account. It could be in terms of frees, interest charges, or even closure of your account.

  • What is the minimum balance for a checking account?

You need to have $ 100 to $ 2,500 to meet the minimum balance requirement. Where some of the traditional offline banks require maintenance of a minimum account balance to avoid monthly service charges.

  • What does no minimum balance mean?

A no minimum balance means denotes that there are no fees levied even if you do not have any balance in your account or your account is empty.

  • Why would a bank require a minimum balance?

Banks as an institution to need funds to run as they run branches, maintain accounts, deliver customer service, and other services too. Therefore, they impose minimum balances on customers.

Conclusion

Thus, by now we know what is a minimum balance? And why it is necessary to maintain a minimum balance. And also study about the minimum balance for a savings account, and other requirements of maintaining a minimum balance, with some of the banks having no minimum balance and some with a low minimum balance. Here, we have successfully explained what is a minimum balance?

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