Here is a question by an iSensey reader: I made sure to deposit back what I’ve withdrawn. In fact, mas malaki pa nga ang idineposit ko before the month ends but why is it the bank still charges me P300 as service fee? My ending balance for the month is above the required maintaining balance of P10,000 for my passbook account.
Here is our take and what we’ve found out regarding this issue:
Bank account holders will find a P300 service charge applied on their savings account like from BPI, BDO, RCBC, Metrobank, Security Bank, PNB, etc if they fall below maintaining balance prescribed by the bank.
Now, what if say the maintaining balance is P10,000 for a passbook account. Say on March 5 you withdraw P3,500 and the remaining balance in your savings is only P8,200. BUT on March 29 you returned and deposited P4,000 making your balance at the end of the month at P12,200.
P12,200 is above the P10,000 maintaining, so why did the bank still deducted P300 from your account? The answer is ADB.
What is ADB? ADB stands for Average Daily Balance and is computed this way:
ADB = (Day 1 ending balance + Day 2 ending balance + Day 3 ending balance …+ Day 30/31 ending balance) / number of days in the month
In computing for below maintaining balance service charges, the bank looks at ADB or Average Daily Balance. The bank does not consider the remaining balance at the end of the month.
So in our example, the maintaining balance for a savings passbook account is P10,000. You, as the client, must have an ADB of at least P10,000 for the month to meet the requirement.
Here is a simple demo:
|DATE||BALANCE AT THE END OF DAY||TRANSACTION|
|March 5||₱8,700.00||withdrawn P3,500|
|March 26||₱12,700.00||deposited P4,000|
Based on our sample, there are 21 days in which the account is below maintaining balance which is from March 6 to 25. The ADB of our example is only P9,925.81 which is below what the bank required, hence, the bank deducted P300 service charge at the end of the month.
HOW TO COMPUTE ADB
Step 1: Add all the end of the day balance from first day to last day of the month. In our sample, it’s March 1 to March 31 (31 days).
March 1 balance + March 2 balance + March 3 balance + … + March 29 balance + March 30 balance + March 31 balance.
In our sample the sum of the daily balance from March 1 to 31 is P307,700.00.
Step 2: Divide the sum of the daily balance from 1st day of the month to the last day of the month.
March has 31 days.
P307,700/31 days = P9,925.81 Average Daily Balance
Step 3: Account ADB less Maintaining Balance – No service charge if result is positive. Service charge or fee of P300 if ADB result is negative.
P9,925.81 – P10,000 = (P74.19) ADB >>> In this example, the account is below maintaining balance requirement
If the client deposited P4,400 instead of just P4,000 to the savings account on March 26, then there won’t be service charge of P300 on March 31. How come?
This is because if P4,400 was deposited on March 26, the sum of the daily balances becomes P310,100.
P310,100 / 31 days = P10,003.32 ADB >>> In this scenario, the account ADB is greater than the bank required monthly ADB of P10,000, hence no service charge at the end of the month.
You can also compute for your own account ADB using formula above and make sure to deposit enough money to cover the days when your account was below maintaining balance.
Here is the comparison:
ATM and Passbook Required Monthly ADB
The minimum maintaining balance required differs on the type of bank account and varies among banks like BPI, BDO, Metrobank, PNB, and RCBC.
Example the BPI regular savings with passbook requires a minimum monthly ADB of P10,000 while their regular savings account with ATM requires an ADB of P3,000. Their BPI Jumpstart account required maintaining balance is only P1,000.
BDO required monthly ADB for their regular passbook savings is P10,000, for ATM it’s P2,000. For BDO Junior Saver the required maintaining balance is only P100.
Metrobank maintaining balance ADB required is P10,000 for regular peso savings account, it’s P2,000 for regular ATM, and P500 for Fun Savers.
RCBC required monthly ADB for regular ATM is P3,000, for regular savings passbook it’s P5,000. They have banking products that does not require ADB or zero maintaining balance like iSave and GoSavers.
PNB maintaining balance for regular savings atm account is P3,000, for their passbook it’s P10,000.
Info on this post are correct as of February 2022; required ADBs may change so make sure your email and phone number registered with your bank is active and up to date. The bank usually communicate account policy changes through sms and email.
We hope that this iSensey Guide helps readers to know more about ADB and thereby avoiding the P300 service fee.