Minimum balance requirement.
In plain English
A minimum balance requirement is a set dollar amount you must keep in an account to avoid a fee or to keep a perk like waived charges or higher interest. Banks measure it in one of two ways: a minimum daily balance, where your account can never dip below the number on any day, or an average balance, where your balances across the whole month have to average above it. If you fall short, the bank typically charges a fee for that statement period. The exact amount and rule are set by each bank, so they vary widely.
01Why it matters
Missing the threshold by even a dollar on the wrong day can trigger a monthly fee, which quietly drains a small account over time.
02The math, step by step
Suppose an account waives its monthly fee if you keep an average balance of $500 (an illustrative figure, not a market rate). You stay above $500 most of the month, but your balance drops to $300 for the final week, pulling your average to $480. Because you fell under, the bank charges that month's maintenance fee.
03What this is NOT
An opening deposit is a one-time amount to get the account started. A minimum balance requirement is the level you must keep month after month, an ongoing rule, not a one-time step.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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