4/04/2016

Below-Maintaining-Balance Penalty by BDO -- Will I Be Charged?

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Question: 

I have a BDO peso passbook savings account with 10k maintaining balance. Last April 2, the balance became 7k. This April 8, I'll deposit around 3,500. Will my account be charged 300 pesos for those days the account balance was below 10k? Thanks po for the help.

Answer:

If you have maintained your account in the month of March, you will not be charged this April even if you fell below the 10k maintaining-balance requirement the month of April.  Why so?  Because you are charged only if you fall below the maintaining balance requirement for two consecutive months.

This means if you fall below the 10k balance requirement for both March and April (these are 2 consecutive months), then you will be charged the 300-peso penalty this April 29 (last business day of the month).  But if you fall below the required balance for only one month, you won't be charged.

You said you will deposit 3,500 on April 8. Will you be able to maintain your account this month of April?  Let us see. Let's compute your Average Daily Balance (ADB for the month of April).

First, let us add all your daily balances from April 1 to 30.

This is how your account will appear for the month of April if you will not withdraw after depositing 3,500:

April 1: Balance is 10k
April 2 to 7; Balance is 7k
April 8 to 30: Balance is 10,500

Let us add your daily balances for the whole month of April:
April 1: 10,000 x 1 day = 10,000 pesos
April 2 to 7: 7,000 x 6 days = 60,000 pesos
April 8 to 30:  10,500 x 23 days =  241,500 pesos

Total daily balances for the month = 10,000 + 60,000 + 214,500 = 311,500

Your Average Daily Balance (ADB) for the month of April:  311,500 divided by 30 days =  10,383 pesos

This means your ADB for the month of April is 10,383 pesos.
10,383 is higher than 10,000,
so you did not fall below the maintaining-balance requirement in the month of April.

You were able to maintain your account in the month of April.