9.22.2014

How to Compute Monthly Average Daily Balance (MADB)

By Nora


How Can I Know If My Bank Account Is Below the Maintaining Balance Requirement?

Deposit the required maintaining balance, do not touch it, so you don't have to worry about the maintaining balance requirement.

But in case you withdraw more than what you should, deposit higher amounts over the next days so your Monthly Average Daily Balance (MADB) will still be equal or higher than your Maintaining Balance Requirement.

This is how to compute your Monthly Average Daily Balance (MADB):

Let's say this is your account:

Date
Transaction
Debit
Credit
Balance





7/01/2014



4,000
7/15/2014
ATM Cash Deposit

8,000
12,000
7/20/2014
ATM Withdrawal
4,000

8,000
7/28/2014
OTC Cash Deposit

7,000
15,000
7/28/2014
Online Bill Payment
5,000

10,000
7/31/2014
ATM Withdrawal
4,000

6,000


FIRST, add your daily balances from the first day of the month to the last day of the month.

From 1st day to 14th day, your daily balance was 4,000 pesos.
4,000 pesos x 14 days = 56,000 pesos

From 15th day to 19th day, your daily balance was 12,000 pesos
12,000 pesos x 5 days = 60,000 pesos

From 20th day to 27th day, your daily balance was 8,000 pesos
8,000 pesos x 8 days = 64,000 pesos

From 28th day to 30th day, your daily balance was 10,000 pesos
10,000 pesos x 3 days = 30,000 pesos

On the 31st day, your balance was 6,000 pesos
6,000 pesos x 1 day = 6,000 pesos

The total of your daily balances for the month is:
   56,000 pesos 
   60,000 pesos
   64,000 pesos
   30,000 pesos
     6,000 pesos
-------------------- 
 189,000 pesos

SECOND, divide the TOTAL by the number of days of the month.
189,000 pesos / 31 days =  6,096.77 pesos

Your MADB is 6,096.77 pesos

Your MADB or Maintaining Balance Requirement is 5,000 pesos.

Obviously, 6,096.77 is higher than your 5,000-peso maintaining-balance requirement,
so you have maintained your bank account for the month.

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