What Is Quarterly Average Balance (QAB) & How it's Calc

MS SAMEER (CMA*CA*CMDM*ast FUND MANAGER*LEGAL ADVISOR) (14938 Points)

07 October 2010

Maintain Quarterly Average Balance in your bank account to avoid penalty

Many a times we find charges/penalties levied by our bank and wonder about the charges. In such cases the best thing is to know exactly the calculation of the charges. Of these charges, QAB or Quarterly Avergage Balance is the most confusing. You always wonder about the calculation of the Penalty levied on the same.

How is the Quarterly Average Balance is Calculated?

Firstly, the daily closing balance is summed up for all days of any given quarter. Then this total is divided by the number of days in the Quarter. The required QAB is different for different types of accounts. You can find the QAB penalty charges from your bank account welcome kit in the charges brochure.

For better understanding lets take an example

Following is the bank statement of Mr Mehta for the quarter Jan 2010 to Mar 2010.

Date	Particluars	Withdrawal	Deposit	Balance
01-Jan-10	BF	-	-	4500.22
10-Jan-10	Salary Credit	-	25000	29500.22
12-Jan-10	ATM Withdrawal	3000	-	26500.22
18-Jan-10	ebay	4256	-	22244.22
28-Jan-10	ATM Withdrawal	300	-	21944.22
31-Jan-10	Power Bill Int Pay	1200		20744.22
01-Feb-10	BF	-	-	20744.22
10-Feb-10	Salary Credit	-	25000	45744.22
24-Feb-10	5 Spice	4256	-	41488.22
26-Feb-10	ATM Withdrawal	4500	-	36988.22
26-Feb-10	Power Bill Int Pay	1100	-	35888.22
01-Mar-10	BF	-	-	35888.22
01-Mar-10	ATM Withdrawal	400	-	35488.22
10-Mar-10	Salary Credit	-	25000	60488.22
26-Feb-10	Power Bill Int Pay	1300	-	59188.22