In normal savings bank accounts, customers may have to pay penalty if they fail to maintain a minimum monthly balance as required. However, for holders of salary accounts, along with providing some other benefits, banks generally waive off the requirement of maintaining minimum monthly balance.
Maintaining a minimum monthly balance is also not mandatory for holders of no frills accounts, but there are restrictions on number of deposits and withdrawals, amount of credit transactions as well as limit on maximum monthly balance. Holders of such accounts not only get any other benefits, but on violation of any of the restrictions, their accounts automatically converted to a normal savings bank account, requiring them to maintain the minimum monthly balance to avoid paying penalty.
Despite being a no frills account, a Jan Dhan account under the Pradhan Mantri jan Dhan Yojana (PMJDY), however, provides overdraft facility and RuPay debit card with inbuilt Rs 1 lakh accident insurance cover to the holders, apart from the luxury of not maintaining a minimum account balance.
However, to become eligible for the overdraft facility, a new Jan Dhan account holder needs to maintain a healthy positive balance for the first six months and should do regular cash transactions as well as transactions through the RuPay debit card issued to him/her.
If satisfied, the bank, in which the Jan Dhan account has been opened, would provide the account holder the overdraft facility of up to Rs 5,000, provided it’s an Aadhaar-linked account.
The overdraft facility may be used by the account holder by paying a nominal rate of interest.
An account holder may take further loans of enhanced amount only after successful and quick repayment of the entire outstanding loan amount.
Holders of Aadhaar-linked Jan Dhan accounts also enjoy the benefits of direct-benefit money transfer to the beneficiaries of government subsidies.
Moreover, holders of Jan Dhan accounts, who opened their accounts between August 15, 2014 and January 26, 2015, also enjoy life insurance cover of Rs 30,000 depending on their eligibility conditions.
For getting a cheque book issued, however, a Jan Dhan account holder is required to maintain a minimum positive balance.