If you own a bank account (a savings account especially) you would agree that maintain it can be more complicated than opening one. Mind you, maintaining a bank account in this context doesn’t involve monitoring the charges daily, changing the banking passwords from time to time, or keeping close tabs on your charges. Instead, maintaining your bank account here means ensuring that your balances don’t fall below the minimum.
The average minimum balance for a savings account varies for each bank. Banks that set average minimum balance usually keep it relatively low. For some banks, the figure could be $100 while; for others, it can be lesser.
Before opening a bank account, it makes sense to conduct in-depth research on the bank you wish to open an account with. Doing this will ensure that you go for a bank that fits your financial status and one that boasts of fair rules and requirements. For instance, the minimum balance is a factor you need to consider before selecting a bank. This is important if you are fond of using up the funds in your account to the barest minimum. If you have an account with a bank that considers minimum balance, it makes sense to understand a these things.
What Is the Average Minimum Balance for a Savings Account?
Due to the added security banks and other financial institutions offer customers, many individuals prefer to put the extra cash into a savings account. As a result, each bank and credit union has diverse regulations on what they require to open and maintain these accounts. This includes stipulations on the minimum balance.
What Are Account Minimum Requirements?
An account minimum is simply regarded as the amount of money you require to open or maintain an account. The requirements can apply to checking, saving, and CD accounts, including how they affect fees, and APRs. Mind you, your bank account’s status hinges on the type of account and bank.
Minimum Requirements for Savings Accounts:
Savings account often need a minimum deposit to open an account or an ongoing minimum balance to earn max interest or prevent fees.
Minimum Opening Deposit:
For savings accounts that need a minimum opening deposit, you must open the account with a specific amount of money. Some financial institutions give you some time to meet that minimum and will shut your account if you fail to.
Minimum Monthly Deposit:
Some savings account need consistent deposits, monthly or quarterly, to earn a higher interest rate or prevent fees. You can meet this requirement with deposits once or twice monthly.
Minimum Balance Requirements:
Some savings accounts require that your accounts always remain above a stipulated balance (minimum). If your balance falls below that balance, you could end up paying fees or interest rates.
Institution Preference:
There is no typical minimum balance for savings accounts at financial institutions of 2011. Instead, institutions like banks and credit unions may decide whether to include this in their regulation at their discretion. Subsequently, the minimum amount needed will vary per bank or financial institution.
Typical Average Minimum Balances (Individual Accounts):
Many financial institutions offer savings accounts for which there is no average minimum balance. The banks that have average minimum balance requirements often keep them a little low, around $100 or less, as they understand customers can empty their accounts and embrace the services of a competitor if they cannot meet the requirements.
Some financial institutions, however, may require minimum balances as high as $1,000 or even more. These banks keep their minimum balance higher because they have researched on the average minimum balance their customers typically hold and are aware that the requirement usually won’t be an issue for these people.
Why Do Banks Need a Minimum Balance?
Banks require you to keep a minimum balance in your savings account as it ensures that they’ll have a reserve of funds to meet the expenses of running their daily operations and maintaining the accounts at the bank.
Banks that don’t require minimum balances generally have different funding sources they can depend on aside from these balances. Conversely, banks that boast of high minimum balance may not have these reserves or substitutes.
Failure to Keep a Minimum Balance:
In several cases, if you fail to keep the minimum balance as stated by your bank in your savings account, the bank charges you a fee known as a penalty fee. But, in some situations, these fees can be huge. In addition, some banks are must stringent. Therefore, they may shut your account if you don’t fix the issue within a specified period.
Often you will instruct the institution to adopt this action when you fill out the paperwork related to opening the account, so this wouldn’t surprise you if it takes place.
How Do Banks Find Out Someone Has Died?
Do You Need a Minimum Balance for a Savings Account?
While it is true that banks need customers, you must understand that opening a bank account is not as easy as it seems. First off, you will need to do some digging. Find out the interest rate of the bank. Does it suit you? What of their rules and regulations? Is it something you can follow seamlessly? Also, you may want to ask if you need a minimum balance for the savings account.
Bank regulations differ. Thus, while some savings account will require a minimum balance, others won’t. For example, banks require savings account holders to have a minimum balance to prevent monthly fees or earn the highest published rate.
A bank will always provide you with reliable information regarding their regulation. If you aren’t sure of what yours is, don’t hesitate to contact your bank. You wouldn’t want to flout their rules as doing so could result in strict punishments. Also, before opening a bank account, it makes sense to contact a financial expert, if possible. He should have the knowledge and experience to recommend the best bank to you.
