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100 FAQ's on Basic Finance

Module Units

What is a MAB (monthly average balance) and how does it affect you?

Monthly Average Balance or MAB is the minimum amount that is supposed to be maintained in your bank account at the end of each day of the month divided by the number of days in a month. 

 

Let us look at an example.

 

Let us assume you have a balance of  ₹15,000 on January 1 in your savings bank account. Assuming you withdrew ₹10,000 on January 5 but deposited ₹10,000 on January 20, here is how your MAB for the month will be calculated.

 

Jan 1 to Jan 4: EOD balance =  ₹15,000*4 = ₹60, 000


Jan 5 to Jan 19: EOD balance = ₹5,000*15 =  ₹75,000


Jan 20-Jan 31: EOD balance =  ₹15,000*12 = ₹1,80,000

 

Total Balance = ₹60,000 + ₹75,000 + ₹1,80,000 = ₹315,000

 

Number of days in Jan (including bank holidays and working days) = 31


Final MAB = ₹3, 15,000/31 = ₹10,161.29

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Units 20/101