IOB Minimum Balance – Updated Rules & Charges

Ramesh, a small shopkeeper from Jaipur, opened a savings account in the Indian Overseas Bank (IOB) last year. He maintained ₹1,500 in January, ₹2,000 in February and ₹1,000 in March. His combined month-end balances added up to ₹4,500, but his average monthly balance fell short of the required minimum. In April, Indian Overseas Bank charged him ₹250 for failing to maintain the minimum balance. This confused him. “Kya karoon main itna paisa lekar?” he sighed, echoing Salman Khan from Wanted.

But what went wrong?

Ramesh assumed his monthly average balance was sufficient at ₹1,500 (₹4,500 divided by three months), but Indian Overseas Bank required a higher minimum. The bank penalised him for failing to maintain the required average balance. Thousands of people across India face similar penalties each year for not meeting minimum balance rules. Understanding IOB’s minimum balance requirements can help account holders avoid penalties and unnecessary financial stress.

IOB Minimum Balance Overview

Minimum balance is the lowest average amount that must stay in your bank account. If this balance is not kept, charges are deducted automatically. Banks do this to cover maintenance and service costs.

In IOB, this rule is followed strictly. Whether you have a savings account, a current account, or a salary account, there is a set minimum amount that needs to be there.

Aamir Khan once said in Lagaan, “Sabr ka phal meetha hota hai.” But in banking, if the balance is not kept, charges can be bitter.

Example: Meena, a homemaker in Chennai, had ₹500 in her account for 15 days and ₹0 for the next 15 days in April. Her monthly average balance was ₹250. But her account type needed ₹1,000. So, she was charged ₹150 in May. She was shocked but later realised the importance of checking the minimum balance terms.

What is Minimum Balance?

A minimum balance means the average amount of money that must be maintained in your account during a month. If the average is less, non-maintenance charges are applied.

This is not the same as keeping a fixed amount every day. It’s the average over a month.
 

Example: Rajiv, a college student in Lucknow, had ₹1,200 one day, ₹0 for 10 days, and ₹2,000 for the rest of the month. His monthly average was ₹1,500. But his account required ₹2,500. Since it wasn’t met, he had to pay ₹100. He said, “Yeh toh cheating hai!”.

IOB Minimum Balance Requirement by Account Type

Different accounts in IOB have different minimum balance rules. The table below gives a clear view:
 

Note: Basic Savings Account has zero minimum balance but limited features.

Example: Kavita, a school teacher in Bhopal, opened a Gold Savings Account. She kept ₹3,000 thinking it was enough. But her branch was in an urban area where ₹5,000 was required. The penalty was ₹200. This taught her to always check the minimum balance by location.

IOB Non-Maintenance Charges

If the required monthly average is not kept, penalty charges are applied automatically. These vary by account type and shortfall amount.
 

These charges include GST (18%).

Example: Suresh, a trader in Delhi, had a current account and was required to maintain ₹5,000. His MAB was ₹1,000 (80% shortfall). He was charged ₹400 as a penalty. He laughed and said, “Bhai ne bola paisa hi paisa hoga, lekin yahan toh fine hi fine hai!”

How to Check Your Monthly Average Balance in IOB?

You can easily check your monthly average balance using the following methods:
 

Example: Rekha, an artist from Pune, used the SMS method and found that her average balance was ₹750 instead of ₹1,000. She avoided a penalty just in time. “Picture abhi baaki hai mere dost,” she smiled — because now she knew better.

How to Avoid Minimum Balance Penalties?

To avoid these charges, follow a few easy steps:

1. Set a balance alert in the IOB app.
    
2. Use auto-transfer from other accounts to keep the MAB.
    
3. Choose a Basic Savings Account if you don’t need many services.
    
4. Check MAB weekly, not monthly, to avoid sudden drops.
    
5. Keep ₹500-₹1,000 more than required, just to be safe.
    

Example:  Deepak, a delivery driver in Bengaluru, had trouble keeping ₹1,000. He changed to a Basic Savings Account. Now, even with ₹50, he feels tension-free. “Darr ke aage jeet hai!” he laughed.

Conclusion

The minimum balance in the Indian Overseas Bank is a must-follow rule. Different accounts have different requirements. Penalty charges are applied automatically when the rule is broken. But by staying informed and checking your MAB regularly, these charges can be avoided.

Thousands of people lose money just because they don’t understand the system. Don’t be like them. Use mobile apps, keep small reminders, and choose the right account. Remember, “Itna sannata kyun hai bhai?”, like Sholay, is a good question to ask when money disappears from your account. Learn the rules, and the bank won’t surprise you.

FAQs: 

1. What is the minimum balance for a regular savings account in IOB?

The minimum balance is ₹1,000 in urban areas, ₹500 in semi-urban areas, and ₹250 in rural areas.

2. Are there any zero-balance accounts in IOB?

Yes, the Basic Savings Bank Deposit Account (BSBDA) comes with zero minimum balance.

3. How can I avoid non-maintenance charges in IOB?

By maintaining the required MAB or switching to a zero-balance account.

4. What are the non-maintenance charges for savings accounts?

Charges range from ₹100 to ₹250, depending on the shortfall and account type.

5. Where can I check my MAB in IOB?

Through the mobile app, net banking, SMS, or by visiting the branch.

6. Is GST included in non-maintenance charges?

Yes, GST of 18% is included in the final penalty.

Apply for Loans Fast and Hassle-Free

Apply Now

About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?