“If a bank is too big to fail, it is too big to exist!”
No one can deny that life has become a lot more convenient with the new age banking but this convenience comes with a lot costs in terms of hidden charges. When you open a bank account, statements like “it is totally free, no bank charges will be levied”, “we will give you a premium account, which is charge-free”, etc., are very common. But, what nobody tells you is this – what is more common is to see certain charges each year, no matter the type of account, or the bank. These ‘hidden bank charges’ crop up from somewhere or the other, and when you question your banking relationship manager, he always has some excuse ready.
Here are some of these common ‘hidden bank charges’:
Non-maintenance of minimum quarterly average balance
Almost all banks insist on maintaining monthly/quarterly average balance. In case you fail to do so, banks can charge anywhere from Rs. 200 to 500 per instance.
What to do: Keep track of your account balance or open account which has no requirement to maintain minimum balance.
Bank branch visits
Most banks discourage customers to visit their branches as branch transaction is much more expensive for banks as compared to ATM or internet banking. So banks charge anywhere between Rs. 50 to 200 for transactions in branch.
What to do: If you are tech savvy and use internet banking coupled with calculated use of ATMs you can avoid visiting bank branches. In case you visit them know the limit after which the banks start charging your visit.
Money transfer charges
Transferring money online has brought lot of convince and is widely used. But even this is not free. If you use RTGS or NEFT to transfer funds from one bank to other, banks charge between Rs. 5 to 25 for each transaction.
What to do: use mix of cheque and internet banking to transfer money.
Debit card annual fee
The annual fee for debit card varies from Rs. 100 to 500 depending on the card. Banks also charge in case you request add on cards for family members.
What to do: request the bank for a ‘lifetime free card’, or take only 1 debit card, with lower fees.
Charges for bank statement request
Request beyond fixed annual, quarterly or monthly account statements entails charge. This may vary from Rs. 50 to 200.
What to do: Avoid taking unnecessary statements and use net banking to keep track of bank account. Also if you need to submit bank statement for anything, take the statement printout with you and get it signed from the bank. In this case most banks do not charge.
Stop payment requests
In case you instruct the bank not to pay an already issued cheque, banks may charge Rs. 50 to 100 for this.
What to do:
Many banks do not charge if you use Phone banking and Net Banking for stop payment requests.
Levying charges may not be wrong, but levying charges after promising a no-charge account is unacceptable. And, these charges would only keep on growing every year as banks focus to earn more revenues from non-interest income. Here’s what you should do instead: when opening an account, take the agreed terms in ‘writing’ from the bank representative.
If a free / premium / no bank charges account is being offered to you at the time of opening, make sure that you make the representative write the same, sign it, and put the bank stamp on it. So that, when they wrongfully charge you, you can claim reversal in a smooth manner. Also, RBI has mandated all banks to display their charges on their website. You must visit the respective pages on your bank’s website to keep yourself aware with any new charges. Also, it is very important to make a list of all savings accounts and close all those which are not required.
Because, every Rupee saved in expense is every Rupee more to invest!
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