Ever wondered what happens to your salary account when there is no salary credited for consecutive months?
The salary account is not closed by the bank automatically. They are not permitted to close the account unless you request for the same. Banks can only freeze the accounts if there are no transactions in the account for a particular period.
When there is no salary credit in the salary or zero balance account for continuous three months, the account will be treated as savings account and individuals need to maintain required Average Quarterly Balance (AQB) as suggested by the bank.
What happens when you fail to maintain AQB?
Many private banks at the end of every quarter levy charges on your bank account if you fail to maintain the required balance.
And you cannot escape even if there is no balance in the account as the charges will take your account in negative.
So, when there is any credit in your account, it would be swept away to make up for the deficit.
Actually, it is not the complete mistake from the bank as banks would have mentioned the same in fine print or in terms or conditions while opening the salary account. It is we who don't read the details mentioned.
Charges such as annual charges, re-issuance charges for debit cards, inter-branch cash deposit charges, demand drafts are charged differently.
Things to take care
- In case of job change, no need to worry if your salary is getting credited to the same account.
- If you are planning for a new salary account, it is better to close the account or maintain AQB as per bank guidelines. You can ask the bank for the charges for not maintaining average quarterly balance.
- Note that bank will not allow you to close the account if there is a negative balance in the account. To close the account, you need to pay the complete account.
- If there is no transaction in account for two years, other than interest credit in savings/current account, the bank will classify it as dormant or inoperative account.