Maintaining a minimum balance is often a requirement in current accounts. This balance helps banks maintain liquidity and manage the cost of operations. Two of the most commonly used metrics for this are Quarterly Average Balance (QAB) and Monthly Average Balance (MAB). Though they sound similar, QAB and MAB are distinct in their calculation methods and implications.<\/p>\n\n\n\n
Let\u2019s break down what QAB and MAB mean individually, highlight their key differences, and explore what options you have got to avoid high minimum balance requirements.<\/p>\n\n\n\n
What is QAB? <\/strong><\/p>\n\n\n\n The quarterly average balance refers to the minimum average balance that must be maintained in your current account over a quarter (3 months). Banks calculate this by summing up the daily closing balances for each day in the quarter and then dividing the total by the number of days in that quarter. <\/p>\n\n\n\n What is MAB? <\/strong><\/p>\n\n\n\n The monthly average balance is the average balance you must maintain within a given month. Here, the bank sums up the closing balances for each day in a month and divides the total by the number of days in that month. <\/p>\n\n\n\n Note<\/strong>: If your current account balance falls below the required average, your bank might levy a non-maintenance charge.<\/p>\n\n\n\nComparing QAB and MAB | Key Differences<\/strong><\/h2>\n\n\n\n