Avoid paying extra fees and charges by keeping track of your accounts and cards and using bank charges only when you need them While NEFT and RTGS are no longer paid, you will still have to pay for IMPS transactions. From this year onwards, you can pay no fees for bank transfers through NEFT (National Electronic Funds Transfer) or RTGS (Real-time Gross Settlement). Shortly after its July monetary policy review, the Reserve Bank of India (RBI) declared that processing fees paid on NEFT and RTGS transactions will not apply as of January 2020. But this news may have come as a surprise to consumers who don’t know about the fees charged by banks on various services. We mention a few changes of this kind.
These are imposed on cash deposits by many banks beyond a certain transaction limit. The first few purchases are, in most cases, free. Usually, for transactions made in your home branch, the rules are more relaxed. “Cash handling fees are an integral part of the bank’s costs. While transacting from your home branch allows for higher limits, you still have to pay charges of somewhere between 50-150 per transaction if you exceed that limit, “said Navin Chandani, Chief Business Officer, BankBazaar.com, a marketplace for online financial services. Although NEFT and RTGS will no longer bear a fee, transactions with IMPS (Immediate Payment Service) will still be paid. The fee is primarily dependent on the amount being transferred and the bank’s transfer policy. Usually, it’s in the range from 1 to 25.
Lack of minimum balance:- In your savings account, almost all banks insist on keeping a monthly or quarterly average balance. For example, customers holding savings accounts in metro and urban center branches are required by the State Bank of India (SBI) to maintain an average monthly balance of about 3,000. For customers in semi-urban branches, the requirement drops to about 2,000 and for rural branches to about 1,000. The bank charges about 5-15 for failure to maintain the required balance of the account. While this may seem trivial, some banks can charge as much as anywhere between 200 and 500.
While it may not sound like a problem to maintain a minimum balance in your bank account, the trouble starts when you have too many bank accounts to keep track of. Think of all the wage accounts that different employers have opened. Once you leave your job, these may cease to be zero balance accounts and may begin to incur a compounding fee as the balance decreases. Keep track of your account balance or open accounts that do not have this provision to avoid paying this charge.
ATM, debit card and cheques:-Banks are allowed to charge customers for more than five transactions made at ATMs in a month, according to the RBI mandate. Depending on the type of transaction, the charges can differ according to the type of transaction. For example, SBI allows eight free transactions to its regular savings bank account holders, including five at SBI ATMs and three at ATMs from other banks. These account holders earn 10 free transactions in non-metros, including 5 at SBI ATMs and 5 at ATMs from other banks. The regulator also said banks are unable to charge customers for transactions that have failed. When you misplace your wallet, you will be paid a $50-500 repair fee by your bank. When you forget your ATM PIN, it is also likely that you will be charged for each reset.
Unfortunately, it is impossible to avoid paying the fees in full. “Many of these charges are interconnected. For example, some banks, even at their own ATMs, require just three to five free transactions. Then there will be additional annual debit card charges, depending on the type of card and account, to the tune of somewhere between 100-1,500. Even if you want to turn from cash to check, you’d have to pay to issue a chequebook, “Chandani said.RBI does not allow banks to charge more than one hundred and fifty per check for the speed clearing of checks worth more than one lakh; there are no charges for values up to one lakh. Keep in mind that if your check bounces, whether you are the issuer or the depositor, you will also have to pay a fee of somewhere between 100 and 150. You will have to pay a fee again if you give a “stop payment” instruction on a check that you have already issued.
Alerts and instructions:-SMS notifications began as a security feature designed to keep you up to speed with your account transactions. This should assist in the prompt detection of cases of fraud. The safety measure, however, comes at a cost. Banks charge SMS alerts around 15 per cent. Standing instructions given to your bank will make life easier when you automatically make your EMIs and bill payments. But for setting up standing orders, some banks charge a one-time fee and a recurring fee for processing it every time. For example, for setting up a standing instruction, SBI charges a one-time fee of approximately 50.
Documentation:-Banks will charge you for issuing documents as well. “Banks charge between 50 and 150 for issuing duplicate physical passbooks and statements of account. Nonetheless, email statements are not charged, “Chandani said. It is better to keep track of your accounts through net banking. If you need a written statement, take a printed statement yourself and get it certified by the bank. Moreover, some banks even charge for certification. For example, SBI charges 1150 for signature verification.
