{"id":889,"date":"2016-03-24T12:56:28","date_gmt":"2016-03-24T07:26:28","guid":{"rendered":"http:\/\/easybankingtips.com\/?p=889"},"modified":"2023-08-11T10:49:43","modified_gmt":"2023-08-11T05:19:43","slug":"quarterly-average-balance-calculation","status":"publish","type":"post","link":"https:\/\/easybankingtips.com\/quarterly-average-balance-calculation\/","title":{"rendered":"How to Calculate Quarterly Average Balance?"},"content":{"rendered":"

When you own a bank account, whether savings or current, the bank requires you to maintain a certain amount in the account during a specific period of time. That is called ‘minimum balance’ or ‘average balance’. The specific duration can be a month or quarter. If the minimum balance is prescribed for a quarter it\u2019s known as ‘Quarterly Average Balance (QAB) and if it\u2019s prescribed for a month it\u2019s called Average Monthly Balance.
\n
\nIn this article, I have explained how to calculate Quarterly Average Balance. But before that I have taken a moment on what Quarterly Average Balance means and how it is determined. I hope it helps you understand the minimum balance requirement of your bank account.<\/p>\n

What is Average Quarterly Balance?<\/h2>\n

Average Quarterly Balance is the amount you are required to maintain in your account over a period of three month or one quarter.<\/p>\n

How to Calculate Quarterly Average Balance?<\/h2>\n

The QAB is calculated by adding the Closing Day Balances<\/u> and dividing the sum by the number of days in the quarter.<\/p>\n

\"What<\/p>\n

For a simple understanding, if the QAB of your account is Rs.500, you need to have at least Rs.500 in the account at the end of the day for the entire quarter. In the example below, we have taken the Jun-Aug quarter and we have decided to maintain Rs.500 as closing day balance for the entire span.<\/p>\n

\"How<\/p>\n

However, you are not bound to\u00a0maintain the same amount at the end of every single day in order to catch up with the QAB. This is impractical from any point of view.<\/p>\n

But it’s important to make sure the average of daily closing balances over the quarter is equal to or higher than the prescribed QAB, not less. This is very important.<\/p>\n

However, if you are not sure you can maintain it you can either keep Rs.45,500 for one entire month or Rs.15,500 for entire span of 3 months. Both the ways, you will be able to maintain the required QAB.<\/p>\n

Here is an excellent read on how to calculate Quarterly Average Balance<\/a>.<\/p>\n

Average Quarterly Balance or Quarterly Average Balance (QAB) varies depending on the type of account and from bank to bank. For example, the basic savings account or No frill account do not have a minimum balance requirement.<\/p>\n

Smart Things to Know About QAB<\/h2>\n

1) Average Quarterly Balance or Quarterly Average Balance (QAB) may vary\u00a0depending on the<\/p>\n