Minimum deposit balance

What is a minimum balance on a deposit: explained in simple words

Minimum balance on a deposit is the minimum amount that must remain in the deposit account throughout the entire validity period of the agreement. The minimum balance is precisely the threshold amount down to which a client can withdraw money from the account, provided that such terms for partial withdrawal of funds are stipulated by the terms of the banking product. 

Keep in mind that far from all deposit offers allow partial withdrawal of funds from the account. You need to check about this possibility in advance with a specialist at the branch. The term minimum balance is not provided for under all programs; most of it is included in special offers with additional options for the depositor. It is necessary so that the client can freely manage funds while not losing accrued interest and without closing the deposit.

Minimum balance amount

Each bank has the right to determine the minimum deposit amount that must remain in the account so that the deposit is not considered prematurely terminated. If the client breaches this threshold, interest will be paid as for short-term "On Demand" offers. Most often, the minimum balance is equal to the initial deposit amount, but banks have the right to change this amount independently.

 If the client initially deposited 50,000 RUB and then topped up their deposit by another 20,000 RUB, only 20,000 RUB can be withdrawn, otherwise the interest will be lost.

Other situations also occur. The bank may independently set the amount of allowable withdrawal, for example, no more than 20% of the initial deposit amount or the total amount in the account. In this case, you can simply multiply the allowed withdrawal amount by the available amount to find out how much you can use.

Also, the credit institution may have additional restrictions, for example, related to the period of time during which it is permissible to perform debit transactions. Certain banks allow clients to withdraw money only 1-2 months after signing the agreement, or conversely, no later than 2 months before the expiration of the deposit term.

What happens if the client withdraws more than allowed by the terms

In certain cases, it is impossible to keep funds in a bank account for a long time. A specific situation may force you to withdraw them prematurely. In this case, you need to carefully study the agreement and pay attention to specific clauses.

Check whether partial withdrawals are allowed on the deposit. If they are permitted, review the terms and conditions. Also, check what interest rate will apply if you withdraw more. This last point is crucial. Often, withdrawing a large amount triggers early deposit closure. The bank automatically terminates the agreement and pays out interest at the minimum demand-deposit rate. To avoid losing profit, carefully review the contract terms and make sure to maintain the minimum balance on the account.