Do you know that you may end up paying heavy service charges to your local bank if you do not maintain AQB (Average Quarterly Balance)? Here’s is a quick guide about AQB.
What is AQB?
AQB, short form of average quarterly balance means the average balance required to be maintained in your bank account every quarter 1st January to 31st March or 1st April to 30th June and so on.
What is the AQB amount?
AQB amount may vary from Rs. 5,000 onwards depending upon the bank and the type of account. AQB amount is always higher for current account as compared to savings account.
What are the Penalties for Non-Maintenance of AQB?
- AQB Penalty – It is generally Rs.750 per quarter
- Cheque Book Charges – Rs. 2 to Rs.5 per cheque leave
- Account Statement Charges – Rs. 25 onwards every month
- Outstation Cheque Clearance Charges – Rs.100 onwards
In addition to the above charges, there are many other free services like Inter-Branch Transactions, Phone Banking etc. which may fall under chargeable services if you do not maintain AQB.
How to Calculate AQB?
- AQB is calculated by dividing sum of end of the day balance with number days in the particular quarter.
- Prepare a passbook of all the dates in the quarter.
- Whenever the transactions are not there leave everything blank except the balance amount which you must carry forward.
- Now at the end of the quarter you can total up the balance at the end of each day.
- Divide the above amount by 90 or 91 or 92 days (depending upon the quarter) to get the AQB.
- With basic mathematics you can also calculate in advance about how much deposit/withdrawal is required to make AQB equal to 5000 or 10,000 or whatever it is.
Example: In this example the dates on which there are no transactions have not been shown. Hence you have to keep in mind that the balance remains the same as per previous day’s balance.
| Date | Details | Withdrawal | Deposit | Balance |
| 1-Jan | Opening Balance | 5,000.00 | ||
| 2-Jan | Salary | 20000.00 | 25,000.00 | |
| 3-Jan | Cash Withdrawal | 7000.00 | 18,000.00 | |
| 5-Jan | Credit Card | 2000.00 | 16,000.00 | |
| 7-Jan | ABC Auto | 5000.00 | 11,000.00 | |
| 9-Jan | LIC | 1250.00 | 9,750.00 | |
| 12-Jan | Loan EMI paid | 2500.00 | 7,250.00 | |
| 15-Jan | Cash Withdrawal | 3000.00 | 4,250.00 | |
| 19-Jan | Airtel | 1000.00 | 3,250.00 | |
| 22-Jan | Reliance Energy | 1000.00 | 2,250.00 | |
| 25-Jan | ABC Society | 2200.00 | 50.00 | |
| 27-Jan | Dividend | 450.00 | 500.00 | |
| 1-Feb | Salary | 20000.00 | 20,500.00 | |
| 2-Feb | Cash Withdrawal | 10500.00 | 10,000.00 | |
| 9-Feb | LIC | 1250.00 | 8,750.00 | |
| 12-Feb | Loan EMI paid | 2500.00 | 6,250.00 | |
| 15-Feb | Credit Card | 1500.00 | 4,750.00 | |
| 17-Feb | Cash Withdrawal | 800.00 | 3,950.00 | |
| 18-Feb | Airtel | 850.00 | 3,100.00 | |
| 21-Feb | Reliance Energy | 900.00 | 2,200.00 | |
| 24-Feb | ABC Society | 2200.00 | – | |
| 1-Mar | Salary | 20000.00 | 20,000.00 | |
| 2-Mar | Cash Withdrawal | 9000.00 | 11,000.00 | |
| 9-Mar | LIC | 1250.00 | 9,750.00 | |
| 12-Mar | Loan EMI paid | 2500.00 | 7,250.00 | |
| 15-Mar | Credit Card | 2250.00 | 5,000.00 | |
| 16-Mar | Cash Withdrawal | 1000.00 | 4,000.00 | |
| 18-Mar | Airtel | 800.00 | 3,200.00 | |
| 21-Mar | Reliance Energy | 750.00 | 2,450.00 | |
| 24-Mar | ABC Society | 2200.00 | 250.00 | |
| 31-Mar | Quarterly Interest Credit | 100.00 | 350.00 | |
|
Sum total of end of days balance |
552,000.00 | |||
| AQB = sum total of end of days balance / number of days in the quarter (90 days) | 6,133.33 |
