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Why do banks have minimum maintaining balance on savings account?
But first, remember that it's free to open or apply an account in the bank. No charges for new account application. No charges when you withdraw or deposit on your branch of account. No charges when you withdraw to an ATM machine of your branch of account. And yet banks are still paying for the cost of those banking services. Have you ever wondered how they manage the cost for just opening a new account application? Banks spend money to pay for employees, buy banking materials (atm card, passbook, atm machines, devices or money counter devices, etc.
Banks need those maintaining balance to pay for banking costs/expenses:
And yes, think of the free cost of keeping your money safe in the bank. Think of the everyday banking transactions which are mostly free. Where do banks get money for paying their costs? Obviously, one of their so called income is the required maintaining balance of its customers.
If the government stops the banks from imposing penalties on accounts falling below maintaining balance, banks will be forced to impose charges on certain banking transactions such as charges for every atm withdrawal, or charges for every deposit transaction.
Do you like it to happen that everytime you open a new account or withdraw and deposit (atm or over-the-counter), the bank will charge a cost for it?
"Why do banks have minimum maintaining balance on savings account?" was written by admin under the Banking category. It has been read times and generated 0 comments. The article was created on .
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