Additional Charges Apply

Banking products and services often come with attractive offers that lure you into believing that you’re getting a great deal at such a low cost. But that’s not always the case. There is always a cost for buying these ‘too good to be true’ products and services which get added to your monthly bill. But if you know what these charges are for you can easily avoid a few and save up:

Money StackAverage Monthly Balance Charges:

Bank expect you to keep a minimum balance in your account every month. If  you end up withdrawing more money and your account balance goes below this limit then you might be charged up to Rs. 250. That’s why always read up on the minimum balance required before opening an account.

Monthly Balance Required.jpg

Credit cardWhich one to use

Most credit cards come with an annual maintenance charge. The card offered may be free only for a year. But after that you will be charged an annual maintenance fee that you might be unaware of. 

Apart from this credit cards have other additional charges too such as late payment charge, charge for exceeding card limit, etc. Make sure you read the terms and conditions before buying your card. Nowadays you get many cards with no annual fees, so compare different credit cards before buying one.

Credit CardATM Transaction:

 ATM transactions are free up to a limit after which you’ll be charged. The first 5 transactions in a month from your own bank’s ATM and the first 3 transactions in a month from other bank’s ATMs are free.

The free transactions include both financial transactions such as cash withdrawals and payments as well as non-financial transactions such as checking your balance, mini statement, changing your pin etc.  E.g. If in a month you checked your Balance twice from your bank’s ATM, you will be left with only 3 free transactions.

After you exceed these limits you will be charged Rs 20 for every financial transaction  and Rs 9.55, for every non-financial transaction.

Here are ATM charges of different banks:

Image Source: Bank Bazaar

Money-Transfer11-min.gifMoney Transfer Charges:

You can transfer money online easily through Net Banking or Mobile Banking but this too comes at a cost. Banks charge anywhere between Rs 2.5 to Rs 50 for each transaction. Read these bank charges before transferring unlimited amounts through net banking. If the amount is really small try using a digital wallet instead.

Apart from the above banks might charge you for other things too like:

  1. Closing your bank account: To close an account without charges your account must exceed one month to one year from the opening. For e.g. ICICI bank charges Rs 500 for closing accounts if it’s within 1 month to 1 year of account opening.
  2. Cheque Transactions: Banks charge for Requesting cheque books beyond an allowed limit and also when cheques bounce.
  3. Bank Statements: Request beyond fixed annual, quarterly or monthly account statements entails charge. This may vary from Rs 50 to 200.
  4. Reset Password/PIN number: You forgot your ATM card PIN number of Net banking Password, be ready to shell out some fee to the bank to reset these. For instance HDFC bank charges Rs 50 plus taxes for PIN reset.
  5. Debit Card decline due to insufficient funds: If you swiped your debit card but there was insufficient fund in the account, banks would charge you for that. For e.g. ICICI bank charges Rs 28.09 per swipe for decline due to insufficient funds.
Bank Charges
Image Source: Economic Times


How To Avoid These Charges?

  1. Compare the offers on different credit cards and go for those without annual fees
  2. If you miss a payment date of a bill remember that charges are going to be imposed. So pay credit card bills and other bills in full amounts only and on time.
  3. Use a digital wallet for smaller transactions and use Net Banking for larger transactions.
  4. Withdraw money from an ATMs in bulk instead of withdrawing small amounts
  5. Swipe your card wherever possible instead of withdrawing money.
  6. Carefully read the information on any product or service before going for them.
  7. Avoid taking unnecessary statements and use net banking to keep track of bank account. Also try using net banking wherever you can for e.g. checking balance, mini statement, request for card blocking, because going to an ATM or bank for these might cost you.

Now that you know what all charges can be applied be careful to avoid the. Hidden charges don’t only apply to banking products, but to a lot of other services & products too such as Mutual Funds, Home Loans, etc. The same rule applies there too Read All Rules Carefully.

If you think we’ve missed out any hidden charges, comment and let us know.



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