1. What is Monthly Average Balance (MAB)?

Monthly Average Balance (MAB) is the average of daily closing balances in a bank account over a calendar month. It is used by banks like Axis Bank to determine whether account holders meet minimum balance requirements and to calculate maintenance charges.

2. How Does the Calculator Work?

The calculator uses the MAB formula:

Where:

• \( \sum Daily\ Balances \) — Sum of all daily closing balances for the month
• \( Days\ in\ Month \) — Number of days in the calendar month (28-31)

Explanation: The formula calculates the simple average of daily account balances throughout the month, providing the monthly average balance required by banks.

3. Importance of MAB Calculation

Details: MAB is crucial for avoiding penalty charges, maintaining account benefits, and ensuring compliance with bank requirements. Many banks impose fees if MAB falls below the specified minimum.

4. Using the Calculator

Tips: Enter the total sum of daily balances in your preferred currency and the number of days in the month. Ensure all values are positive and valid.

5. Frequently Asked Questions (FAQ)

Q1: What happens if MAB falls below the minimum requirement?
A: Banks typically charge a penalty fee, which varies based on the account type and the extent of the shortfall.

Q2: How is MAB different from quarterly average balance?
A: MAB calculates average over one month, while quarterly average balance calculates over three months. Both serve similar purposes but for different time periods.

Q3: Do weekends and holidays affect MAB calculation?
A: No, MAB considers every calendar day of the month, including weekends and holidays, using the closing balance for each day.

Q4: Can I maintain MAB with fixed deposits?
A: This depends on the bank's policy. Some banks include fixed deposit balances in MAB calculation, while others only consider savings/current account balances.

Q5: What is the typical MAB requirement for Axis Bank accounts?
A: MAB requirements vary by account type, ranging from ₹10,000 to ₹1,00,000 or more for premium accounts. Check with your specific account terms.