ICICI Bank Hikes Minimum Balance: How to Make Idle Money Work Harder
ICICI Bank’s hike in minimum average balance is a reminder that idle money loses value over time. Here’s how to use savings accounts and liquid funds together to maximise returns while maintaining liquidity.
ICICI Bank’s increased minimum balance rule highlights the need for smarter money allocation between savings and investments.
Starting August 1, ICICI Bank has raised the minimum average balance (MAB) for new savings accounts in metro and urban areas from ₹10,000 to ₹50,000. While this change applies only to new customers for now, it’s a clear signal that banks want more deposits — but without offering significantly higher returns.
Savings accounts offer safety and easy access, but with interest rates hovering at just 2.5–3.5%, inflation quickly erodes purchasing power. Financial experts suggest a smarter, layered approach:
- Maintain the MAB to avoid penalties.
- Keep 1–2 months’ expenses in savings as an emergency buffer.
- Invest any surplus into liquid funds for higher returns, typically in the 6–7% range.
Liquid funds, which invest in ultra-short-term debt instruments, provide quick liquidity — often within a day — but don’t guarantee capital. Still, they can be a better option for short-term surplus money than letting it sit idle in low-yield savings accounts.
The takeaway: split your funds strategically between savings for instant needs and liquid funds for better growth.
