The Reserve Bank of India (RBI) has introduced new savings account rules that will take effect from 1st October 2025. These changes aim to make banking more transparent, affordable, and user-friendly for customers across India. The updates primarily cover ATM transaction charges, minimum balance requirements, and penalties, ensuring that account holders can enjoy greater flexibility and convenience.
The new framework is expected to particularly benefit small account holders and people who rely heavily on ATM services for daily transactions.
What’s Changing in the RBI’s 2025 Rules
The RBI’s new savings account rules bring several key improvements. From reduced ATM charges to uniform minimum balance requirements, the changes are designed to support both urban and rural customers.
Here’s an overview of the updates effective from 1st October 2025
| Aspect | Previous Rule | New Rule (Effective 1st October 2025) |
|---|---|---|
| ATM Charges | ₹20–₹25 per extra transaction (varies by bank) | First 5 transactions per month are free; ₹10 per transaction after that |
| Minimum Balance Requirement | ₹500–₹2000 (varied by bank and area) | ₹500 for urban/metro branches and ₹200 for rural branches |
| Penalty for Non-Maintenance | ₹100–₹250 per month (varied) | Charged only if balance stays below ₹500 for more than 3 months |
| Interest on Balances | No change | Remains the same, calculated monthly |
Reduced ATM Charges for Customers
One of the most notable changes concerns ATM transaction fees. Until now, most banks charged between ₹20 and ₹25 for every transaction beyond the free monthly limit.
Starting 1st October 2025, customers will receive five free ATM transactions per month, which includes both same-bank and other-bank ATMs. After these free transactions, a nominal charge of ₹10 per withdrawal will apply.
This update makes ATM access more affordable, especially for those who rely on cash for everyday expenses. It also aligns with RBI’s effort to promote fairness and reduce hidden banking costs.
New Minimum Balance Requirement
The RBI has standardized the minimum balance rules across all banks to ensure equality among customers. Earlier, different banks had varied minimum balance limits, ranging from ₹500 to ₹2000, depending on branch location.
From 1st October, the rule will be simplified:
- Urban and metro customers must maintain a minimum balance of ₹500.
- Rural customers must maintain a minimum balance of ₹200.
This uniform rule will help prevent confusion and reduce the burden on small depositors, especially those in rural and semi-urban regions.
Revised Penalty for Low Balance
Previously, banks imposed a monthly penalty of ₹100–₹250 for not maintaining the required minimum balance. Starting October 2025, penalties will be applied only if an account balance remains below ₹500 for more than three months in a row.
This allows customers additional time to restore their balance without being penalized immediately. It’s a more customer-friendly approach that encourages financial stability and flexibility.
Interest on Savings and Account Benefits
The RBI has made no changes to the interest structure for savings accounts. Interest will continue to be calculated on monthly balances based on each bank’s existing rate policy.
This consistency ensures that customers continue earning the same returns while enjoying the benefits of lower charges and simpler account management.
How Customers Can Prepare
Before the new rules take effect, customers should take a few simple steps to ensure smooth banking:
- Track monthly ATM usage and try to stay within the 5 free transactions limit.
- Maintain at least ₹500 in urban or metro accounts, and ₹200 in rural accounts.
- Review your bank’s updated policy documents or website for any branch-specific details.
Following these practices will help account holders avoid unnecessary fees and make full use of the RBI’s customer-friendly changes.
Summary Table of RBI’s Savings Account Updates 2025
| Feature | Benefit to Customers |
|---|---|
| Reduced ATM charges | More affordable cash withdrawals |
| Lower minimum balance | Easier account maintenance |
| Delayed penalty | Extra time to recover low balance |
| Simplified structure | Transparent and fair banking for all |
Conclusion
The new RBI savings account rules effective from 1st October 2025 are a significant step toward making banking easier and more inclusive. With reduced ATM fees, lower balance requirements, and fairer penalty terms, customers can expect a more stress-free and transparent banking experience. These reforms are especially beneficial for those with modest incomes, ensuring that every account holder can manage their money with confidence and convenience.
