The slow-drip of fees and penalties that your bank levies may eat into your savings. Be informed

Banks provide many services for free, but you are also charged for a host of other services. These charges may vary from bank to bank, and may also vary within the same bank depending on the type of account you have. Here’s a list of some common and important charges applied by banks on various services.

Debit card charges

People today don’t like to carry cash: their debit card extends the power of their bank account. But wait: even debit cards come with fees. The more premium your card is, the higher the fee. The fees may also depend on the type of savings account you hold. Some premium savings account may allow free debit cards whereas a basic account may charge a fee ranging from ?99 to ?750. If you lose your card, you may need to pay ?200 for a replacement card.

Minimum balance charge

Banks levy penalties on savings accounts if you maintain a balance below the required threshold for the account. The threshold amount is mostly calculated on the basis of a monthly average balance (MAB) or average quarterly balance (AQB), depending on each bank’s criteria and the type of account. The charges may be levied as a fixed amount, a percentage of the shortfall, or both, depending on the bank’s norms. Premium savings accounts normally have a higher MAB requirement, which, if not maintained, leads to a downgrading of the account in terms of the benefits and services offered.

Transfer charge

Most banks levy charges for electronic money transfers through IMPS, NEFT, and RTGS. The charges depend on the mode and the volume of transfer. For example, NEFT charges range between ?1 and ?25 (plus GST); RTGS may cost between ?5 and ?50 (plus GST), depending on the amount slab; and IMPS fee range between ?1 and ?15. Charges on IMPS transactions below ?1,000 are waived by some banks.

ATM withdrawal charges

Banks allow you to withdraw cash at no charge from their own ATMs and from other banks’ ATMs. However, they may charge you for exceeding the number of free transactions. Normally, banks allow up to five free transactions per month at their own ATMs, and three free transactions at other banks’ ATMs. If you exceed these limits, you may end up paying around ?20 per withdrawal.

Duplicate statement charges

For a normal savings account, banks allow an annual account statement once in a financial year in physical copy. But if you request for a duplicate statement, you may be charged. A duplicate statement may cost you between ?50 and ?100 per specified number of entries or around ?10 per page, depending on a bank’s norms. If you get your statements by e-mail, it may be free, thus saving you some money.

Cash deposit charges

Banks restrict the number of cash transactions under a savings account. They normally levy charges if you exceed the number of free cash transaction, or the amount limit, as prescribed by the bank under any account types.

Free cash transaction are typically limited to three to five per month and thereafter charged, either as per prescribed slabs, or through fixed charges on a per-transaction basis.

For outstation cheques

You may deposit an outstation cheque with a bank which may not have a branch in your city. In that case, your bank may incur postage and other expenses to clear such a cheque. Therefore, banks normally levy fees on such outstation cheques ranging between ?50 and ?200 (plus GST), depending on the bank’s norm.

Other charges

Apart from the above-mentioned charges, banks may levy fees and penalties under different situations: if a cheque bounces, for availing of SMS service, for account closure, extra cheque book, demand drafts, rewards point redemption, locker rent, and PIN regeneration.

Each bank has its own set of offerings and corresponding charges, so you must check with your own bank about the charges it imposes on various services availed by you.

 26 Feb 2018, 05:30 AM