# What is Monthly Average Balance and How to Calculate It?

The monthly average balance is the average balance you have maintained at the end of each day in a month. This balance is calculated by taking the sum of the balance on all the days and dividing it by the number of days.

The monthly average balance is also known as MAB in banking terms. We have now discussed the meaning of the term. So now let us learn how this balance is calculated.

But before that, I want to talk about something very important. And that is about the difference between the monthly average balance and the minimum balance.

There are some premium bank accounts that require the account holder to maintain Rs. 25,000 or more as MAB. This does not mean that the account holder has to maintain Rs. 25,000 at any given point in time.

Both of these things are totally different. You will understand the concept even better when we discuss the method to calculate the MAB of your bank account.

One more thing you should keep in your mind. If you want to check the MAB of your bank account. Then you don’t have to always keep calculating it by yourself.

You can check it with the help of the internet banking services of the bank. (In most of the banks) If not then you can call the customer care of the bank and ask the executive to tell your MAB for any given month.

## How to Calculate Monthly Average Balance or MAB?

Follow the steps mentioned below to calculate your MAB. I have even mentioned a table below which is an example of what I have explained below.

Steps to Calculate Monthly Average Balance:
2. Highlight the end of the day balance of each day of the month.
3. Add the end of the day balance of each day. (Get the sum of it)
4. Now divide the sum total by the number of days in the month. (28 or 30 or 31)
5. The answer what you get the nothing but the MAB of your account for that month.

### Example Calculation

 Day of the Month End of the Day Bank Account Balance 1 Rs. 26,000 2 Rs. 20,000 3 Rs. 32,000 4 Rs. 40,000 5 Rs. 52,000 6 Rs. 12,000 7 Rs. 18,000 8 Rs. 88,000 9 Rs. 1,02,000 10 Rs. 1,20,000 11 Rs. 28,000 12 Rs. 10,000 13 Rs. 12,000 14 Rs. 18,000 15 Rs. 20,000 16 Rs. 36,000 17 Rs. 40,000 18 Rs. 42,000 19 Rs. 30,000 20 Rs. 46,000 21 Rs. 50,000 22 Rs. 37,000 23 Rs. 40,000 24 Rs. 87,000 25 Rs. 90,000 26 Rs. 97,000 27 Rs. 76,000 28 Rs. 16,000 29 Rs. 48,000 30 Rs. 99,000

The Sum total of the balance on all the days is Rs. 14,00,000. (Day 1 + Day 2 + Day 3 + …….. + Day 30)

So I have to divide this by the number of days in the month. In this case, there are 30 days.

Calculation: Rs. 14,00,000/30 Days = Rs. 46,666.66

So the monthly average balance we get is Rs. 46,666.66.

Conclusion

This is how you can calculate the MAB easily. But in case you don’t get to get yourself involved in these calculations. Then you can use any MAB calculator online or call the customer care of your bank or use the internet banking services.