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.

Average Quarterly balance

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

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