Having a savings account is essential once you start earning, as such a bank account can help you in securing your capital along with attractive interest rates.
Banks and other financial institutions in the UAE offer different types of bank accounts such as savings accounts, current accounts, salary accounts, fixed deposit accounts and more for their customers. These bank accounts have specific requirements such as minimum balance, minimum income, minimum deposit and more to be fulfilled by the account holders.
The account holders need to maintain a minimum balance based on the terms of the chosen type of account. The banks are authorised to levy certain charges on the bank accounts that do not meet the basic monthly requirements.
In this post, we will help you learn why banks charge a penalty on non-maintenance of the minimum monthly balance and how you can get away from these charges.
Banks in the UAE charge a penalty on non-maintenance of a minimum account balance by the account holders. There could be numerous reasons for the account holders not being able to maintain the minimum balance in their bank accounts. The reasons include being financially weak or in need of emergency funds.
It is challenging to maintain a minimum balance for the account holders who are financially weak and barely manage to pay for their expenses. On the other hand, the account holders in need of emergency funds may also need to withdraw their minimum balance from the bank account to meet their financial requirements.
Banks in the UAE need to get the penal charges approved from the UAE Central Bank before implementing them. The standard monthly fee charged by the banks in the UAE is AED 30, which may vary from bank to bank.
The bank needs to inform the account holders via SMS or email that the penal charges will be levied in case the account balance goes below the monthly balance limit. In case the account holders do not need to continue using the bank account, they can contact the bank and have it closed to avoid the charges.
Keep reading to find out what else can be done to avoid paying the penalty on non-maintenance of the minimum balance in your bank account.
The account holders who do not want to maintain a minimum balance in their bank accounts can switch to zero balance savings accounts. If you are a salaried employee, you may already have a zero balance savings account. These bank accounts are basic savings accounts opened by your employers for a hassle-free salary transfer every month. You can use the same for your day-to-day transactions and avoid using a bank account that comes with a minimum monthly balance requirement.
Apart from this, you can also try opening a basic bank account with minimal additional benefits. The minimum balance requirement for these bank accounts is zero (monthly and quarterly). The banks offer such accounts to increase financial inclusion and help people from economically weaker sections manage their finances more efficiently.
We hope that this post helped you understand why the penal charges are levied on the bank accounts and how you can avoid the same. If you are looking for opening a basic bank account, you can visit our website and go to the bank accounts section to explore your options with great ease.
You can also contact our help and support team to understand the detailed features and benefits of your shortlisted bank accounts. Our financial experts will not only analyse your financial needs and suggest suitable options but also take you through the account-opening process and have one opened quickly.