On August 9, 2025, ICICI Bank, India’s second-largest private lender, announced a sharp increase in the minimum average balance (MAB) for new savings accounts opened on or after August 1, 2025. Metro and urban customers now need to maintain Rs 50,000, up from Rs 10,000—a 400% jump. Semi-urban accounts require Rs 25,000 (up from Rs 5,000), and rural accounts need Rs 10,000 (up from Rs 2,500). Existing customers keep their old limits, and pensioners are exempt. An X post from @REDBOXINDIA said, “ICICI Bank hikes MAB to Rs 50,000 for metro accounts, Rs 25,000 for semi-urban!”
A 400% hike? That’s a big change for new customers!
Penalties and How MAB Works
If you don’t meet the MAB, you’ll face a penalty of 6% of the shortfall or Rs 500, whichever is lower. For example, if your metro account is Rs 10,000 short, the penalty would be Rs 600 but capped at Rs 500. MAB is calculated by adding your daily closing balance for the month and dividing by the number of days. To meet the Rs 50,000 MAB in a 30-day month, you could keep Rs 50,000 daily or, say, Rs 15 lakh for one day (15,00,000 ÷ 30 = 50,000). Timing big deposits, like a Rs 7.5 lakh salary for two days, can also work.
Penalties capped at Rs 500? That’s some relief, but still tough!
Other Fees and Changes
ICICI also updated cash transaction rules. You get three free cash deposits per month up to Rs 1 lakh total; after that, it’s Rs 150 per transaction or Rs 3.50 per Rs 1,000, whichever is higher. Third-party deposits are capped at Rs 25,000 per transaction. Cheque return fees are Rs 200 for outward returns (deposited cheques) and Rs 500 for inward returns (issued cheques). In April 2025, ICICI cut savings account interest rates by 0.25%, with balances up to Rs 50 lakh earning 2.75% and above Rs 50 lakh earning 3.25%.
More fees for cash deposits? That’s pushing people to go digital!
Tips to Avoid Penalties
To meet the new MAB, you can:
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Time Deposits: Deposit large sums, like a salary, for a few days to hit the MAB.
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Use Sweep-In: Link a fixed deposit to your savings account to earn more interest after meeting MAB.
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Switch Banks: Move to banks like State Bank of India (SBI), which scrapped MAB rules in 2020, or others with lower MABs (Rs 2,000–10,000). For example, HDFC Bank requires Rs 10,000 in metro areas, Rs 5,000 in semi-urban, and Rs 2,500 in rural branches.
SBI has no MAB? That’s a good option for many!