In a big step towards making banking simple and accessible for all, Canara Bank has announced a major change that will benefit millions of its customers. Starting June 1, 2025, Canara Bank minimum balance rules have been fully waived, which means customers no longer need to keep a minimum balance in any type of savings account.
With this move, Canara Bank becomes the first major public sector bank to scrap the Average Monthly Balance (AMB) rule entirely across all savings bank accounts—bringing a real “zero balance account” facility to all its users.
What Has Changed in Canara Bank Minimum Balance Rule?
From June 1, 2025, all Canara Bank customers can hold zero balance in their savings bank accounts without worrying about fines or penalty fees.
Earlier, customers were required to maintain a specific average monthly balance, which differed depending on the branch location:
- ₹2,000 for urban and metro branches
- ₹1,000 for semi-urban branches
- ₹500 for rural branches
If a customer failed to meet these balances, they were charged a penalty. These charges could go as high as ₹45 plus GST per month depending on how short the balance was.
Now, these penalty charges are gone completely.
Which Accounts Are Covered?
This zero balance feature is applicable for all types of savings accounts, including:
- Regular savings bank accounts
- Salary accounts
- NRI (Non-Resident Indian) SB accounts
- Student and senior citizen accounts
According to the bank’s official press release, no savings account holder will be penalized for not maintaining an average balance. It is now a true zero-balance account policy, similar to what State Bank of India had introduced in 2020.
Why This Move Matters
The updated Canara Bank minimum balance rule is more than just a technical banking change. It reflects a shift toward financial inclusion. Here’s why it matters:
1. Promotes Banking for All
People from rural areas, students, daily wage earners, and low-income groups often struggle to keep the required monthly balances. This change allows them to use banking services without stress.
2. Encourages First-Time Users
Those who were hesitant to open bank accounts because of penalty fears can now step in freely. This will help increase formal banking adoption, especially in semi-urban and rural regions.
3. Supports Digital India Goals
By simplifying savings accounts, Canara Bank aligns itself with the government’s mission of a cashless, digital India. With more people encouraged to keep their money in banks, digital transactions will naturally rise.
Announcement and Official Confirmation
The announcement was made by Canara Bank through a public press release on Saturday, May 31, 2025. The bank confirmed that the rule applies from June 1, 2025, and will stay applicable across its wide customer base.
A spokesperson for the bank stated:
“This initiative establishes Canara Bank as the leading Public Sector Bank offering a true zero-penalty experience across all SB accounts.”
Previous Penalty Charges for Non-Maintenance (Now Waived)
Before June 1, 2025, Canara Bank used to levy the following charges for not maintaining the required AMB:
Urban / Metro Branches:
- ₹1,999–₹1,500: ₹25 + GST
- ₹1,499–₹1,000: ₹35 + GST
- ₹999 and below: ₹45 + GST
Semi-Urban Branches:
- ₹999–₹700: ₹25 + GST
- ₹699–₹400: ₹35 + GST
- ₹399 and below: ₹45 + GST
Now, none of these charges apply.
What About Interest on Savings Account?
Even with the zero balance facility, Canara Bank continues to offer competitive interest rates on savings accounts. The interest rates (as of May 19, 2025) range from 2.7% to 4%, depending on the account balance:
| Account Balance | Interest Rate (%) |
|---|---|
| Less than ₹50 lakh | 2.7% |
| ₹50 lakh – less than ₹5 crore | 2.75% |
| ₹5 crore – less than ₹10 crore | 2.8% |
| ₹10 crore – less than ₹100 crore | 3.05% |
| ₹100 crore – less than ₹200 crore | 3.5% |
| ₹200 crore – less than ₹300 crore | 3.1% |
| ₹300 crore – less than ₹500 crore | 3.1% |
| ₹500 crore – less than ₹1000 crore | 3.4% |
| ₹1000 crore – less than ₹2000 crore | 3.55% |
| ₹2000 crore and above | 4.0% |
These rates make Canara Bank savings accounts both safe and rewarding, even for users who keep low balances.
What Should Account Holders Do?
You don’t need to take any action to enjoy this benefit. The changes are automatic and effective from June 1, 2025. You can now:
- Keep your account active without worrying about balance limits
- Use digital channels freely (mobile banking, internet banking, UPI)
- Open new savings accounts without minimum balance restrictions
This is especially useful for people who use their bank account only for basic needs, such as paying bills, transferring money, or receiving salary.
The removal of the Canara Bank minimum balance rule is a customer-first move that simplifies banking and gives people more freedom over how they use their money