MOD balance and Available balance

We know that Banks are an important financial body of the Economy in a country. Bank Accounts are the most important segments of Banks. These are the financial accounts that are maintained by the Banks. The accounts facilitate the financial transactions between its customers and the institutions. There are different terms and conditions for each type of Bank Account available in the Economy. There are different types of Accounts that are facilitated by the Banks. These include- Saving Account, Current Account, Fixed Deposit Account, Recurring Deposit Account, NRI Account, and the DEMAT Accounts. 

For managing the personal and professional finances of the people in the Economy, Bank Accounts are one of the most helpful assets. It simplifies the transaction process for the customers. One can sit anywhere and make a transaction, via mobile phones and internet connections. One of the most simple ways of growing money is by opening a Bank account. These accounts have several perks, which is advantageous for their respective customers. The combination of the Available Balance and the MOD Balance in a Bank Account is the total credit amount in an account of a customer.  

Let us discuss the two components that make an Account of a Customer- the Available Balance and the MOD Balance.

MOD Balance

As already mentioned, MOD extends as a Multi Option Deposit. It is the facility through which the excess amount from a customer’s accounts is a sweep to the fixed deposits. In case, the total amount in an account exceeds the margin set by the Bank, then the excess amount will be automatically transferred to the MOD Balance. These accounts have a higher rate of interest as compared to the rate of interest in the fixed deposit account. MOD Accounts are generally created for a tenure of one year. Some of the significant features of MOD Accounts are-

• Minimum tenure: 1 year
• Maximum tenure: 5 year
• Maximum Deposit amount: No margin
• Minimum Deposit amount: Rs. 10000
• The eligibility for applying in Multi Option Deposit is the same as for the eligibility criteria for Fixed Deposits.
• The MOD account is generally linked to the customers saving accounts so whenever the depositor issues a cheque that does not cooperate with the amount available in the saving account., then the bank automatically takes that amount from the MOD account of the customer
• Unlike Fixed Deposit accounts, the customers can withdraw money from the MOD account, in case of an emergency

Available Balance

Available Balance refers to the withdrawal amount available with the account holder. The account holder is free to use this portion of the total credit amount in the Bank account. These portions are available for urgent and immediate use. These amounts include transfer amounts, deposit amounts, withdrawal amounts, and other amounts. These amounts are updated by the Banks, throughout the day. Any transaction made in the day has an impact on this account and balance. The available balance is different from that of the current balance. Current balances account for all different pending transactions of the account holder. It must be noted that these accounts and balance does not include any of the pending transaction amounts that have not been cleared by the account holders, yet. 

Available balances are also used to make online payments. It can either be done by you or your bank. It is possible on the billers part to ask the bill amount from the bank through your bank account, or you can directly pay the bill from the bank account- on your own. Available balances can be withdrawn using ATM cards and in-hand cash amounts from the Banks directly. However, you cannot exceed the amount available in your account for making transactions. This will create issues for other pending transactions and a case of overdraft will come up. 

Now, let us make a distinction between MOD Balance and the available balance. 

Difference- MOD and Available Balance

Conclusion

Banks and Bank Accounts are the most important segments of Banks. These are the financial accounts maintained by the Banks. For managing the personal and professional finances of the people, Bank Accounts are one of the most helpful assets. The combination of the Available Balance and the MOD Balance in a Bank Account is the total credit amount in an account of a customer. MOD extends as Multi Option Deposits, which takes the extra amount from an account to a fixed deposit account. And, Available Balance is the balance that is usable by the customer, at any time.