Smart things to know about Quarterly Average Balance

1. QAB is the average of the all the closing day balance of a bank account in a given quarter.

2. It can be calculated by adding up all the closing day balance in a given quarter and then dividing it by the number of days in the quarter.

3. Maintaining Rs 90,000 in a bank account for 1 full month is same as keeping Rs 30,000 for full 3 months as 90,000 x 30 days = 30,000 x 90 days.

4. Savings account holders are typically required to maintain a minimum QAB in their bank account and most banks levy a penalty charge if an account holder does not of maintain this balance.

5. QAB requirement varies from bank to bank, and is sometimes also based on the account holder’s location (urban, semiurban and rural) and/or category of account (normal, privilege, platinum, etc).

(Content courtesy: Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta)