Minimum Balance Requirement: What They Mean

If you have ever opened a checking or savings account with a bank they may have imposed a minimum balance requirement. This can mean different things for different banks. For the most part if your checking account dips below a certain balance, at any time during the month, you will be charged a fee, and it could be $10 or $15 but it all depends on the bank because they all charge different fees.

Sometimes there is a minimum balance requirement on your account which you will have to maintain if you want your account to continue to earn interest. Going below that balance stops interest from accruing on your account. Banks can calculate your minimum balance differently. They may take the average minimum balance that you had in your account for the entire month and use that figure as the minimum balance.

Still other banks look at your total relationship. For example if you have a checking account, savings account, home equity line of credit, and a certificate of deposit and you have balances with all of these accounts its probably a safe bet that you will have an easier time meeting your minimum balance requirement. You are adding the balances of all of your accounts in order to arrive at the minimum balance.

Speak with you financial advisor to see what is the best option for you to pursue. You can leave all of your money in these accounts to meet your minimum requirement or you could look at other options for earning interest on your money. It's a good idea to explore all options because you wan to make sure you receive every bit of interest that you possible can when it comes to your accounts. Going in one direction as opposed to another could be the difference between making money and losing money.

If you find that one particular type of account is not meeting your needs you may be able to convert that account into another account without having to close it out or change your account number. There are some accounts that will let you order checks for free as long as they are the standard kind, and you may be able to get free cashier checks just by meeting a minimum balance requirement or having a certain deposit relationship on file. The best thing to do is visit your bank and ask about all of their free products and services. You might be surprised at what's available.