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Minimum Balance Penalty Calculator

Work out minimum balance penalty instantly with clear inputs, formula shown and shareable results.

About Minimum Balance Penalty Calculator

Minimum balance penalties are charged as a percentage of the shortfall subject to a cap, assessed on the average balance for the month. Expressed against the shortfall, the annual charge often exceeds any interest the balance could have earned.

Formula

Penalty

Penalty = min(shortfall × rate, monthly cap)

Worked example

With the default values below, Minimum Balance Penalty Calculator returns Monthly Penalty of $210.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Required Minimum Balanceminimum 0
10,000
Average Balance Maintainedminimum 0
6,500
Penalty As Share Of The Shortfallaccepts 0–30 %
6 %
Monthly Penalty Capminimum 0
600

Results

Monthly Penalty
$210.00
Shortfall Below The Minimum
$3,500.00
Annual Cost If It Continues
$2,520.00
Annual Penalty As Share Of The Shortfall
72.00%

Step by step

  1. 1Values used
  2. 2Penalty
  3. 3Monthly Penalty= 210.00
  4. 4Shortfall Below The Minimum= 3,500.00
  5. 5Annual Cost If It Continues= 2,520.00
  6. 6Annual Penalty As Share Of The Shortfall= 72.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

Is the penalty on the shortfall or the whole balance?

On the shortfall, which is why keeping close to the minimum limits the damage.

Can the requirement be avoided?

Basic and salary accounts usually carry no minimum balance obligation — ask about switching the account type.

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