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.
 

₹400

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: