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9 Charges of savings accounts that you should know about

Bank holders can be charged a number of fees on account of non-maintenance of average monthly balance, ATM withdrawal and debit card charges etc.

Savings accounts are the simplest of all the financial products. It is essential to have savings accounts as it is one of the first points of contact in the financial world. 

Although it is a basic product, savings account also carry some charges. Here are some of the main charges:

Non-maintenance of average monthly balance:

Many savings bank accounts except basic savings account and zero balance savings accounts have a minimum average balance. The minimum average balance can range anywhere between Rs.1,000 to Rs.10,000 depending on the type of savings account. The penalty for non-maintenance of the minimum charge also differs according to the branch location and the magnitude of the non-maintenance of the average minimum balance.

Read:  A to Z of Minimum Average Balance

ATM withdrawal:

 Cash withdrawals from ATM  no longer free. Cash withdrawals of up to 5 transactions in the same branch ATM and up to 3 transactions in a different bank ATM are free for the individuals. Once the maximum number of free transactions are over, banks can charge a nominal fee of up to Rs.20 towards that transaction.

Debit card charges:

Many banks issue debit cards while opening a savings account. However, banks charge an issuance fee and annual maintenance fee for the debit cards. Today, one can also personalise the debit card by paying a few extra bucks. The charges of the debit cards will vary according to the type of savings account. The savings account meant for high network individuals will carry higher fees than a normal savings account.

Internet banking charges:

The RBI recently did away with the charges for payments through NEFT and RTGS.  This move will give impetus to digital transactions. However, there was no mention of IMPS which is the instantaneous transfer of money from one account to another. It can also take place on bank holidays. Typically banks charge nearly Rs.5 plus applicable GST  for IMPS transfer of up to Rs.10,000. 

Cheque book charges:

 Many banks offer a fixed number of free cheque books on a quarterly basis. If you want additional cheque books, it will be additional cost. However, there are some bank accounts that do not provide a free cheque book and in this case one has to apply for a cheque book by paying some extra charges. In this case, every additional cheque book will come with an extra cost.

Declined Transactions due to insufficient balance:  

Banks can charge customers in case of a cheque bounce. The charges can vary from Rs.100 to Rs.500 per instance. Banks can also charge a fee if there are not enough money for a scheduled payment such as systematic investment plan in mutual funds. The charges will be levied every time the bank tries to carry out the transaction.

Replacement Fee:

Banks also charge a fee to replace your debit card in case it is lost or stolen. The charges can range from Rs.100 to Rs.500.

Cardless cash withdrawal :

Recently, few banks have started cardless cash withdrawal. In this facility, a limited number of transactions are free in a month and after the limited number of free transactions is exhausted, a small fee is charged for every transaction.

Read:  Forgot to carry your debit card? Cardless withdrawal is here

Physical Statements:

Many banks provide physical and email statements. While email statements are free, banks can charge around Rs.1000 for physical statements.

These are were nine important fees that banks can charge their savings account holders. Although the charges can seem like a small amount but it can turn into a  substantial amount in a few years’ time. Hence, it is important to take a note of these charges.

One easy to beat these charges is to look for a bank and savings account that have minimal charges. Non-maintenance of average minimum balance is one of the major headaches of many saving account holders. Opting for a zero balance account can be the easiest way to mitigate the penalities for not keeping the average balance.

Take a look at the different zero balance accounts here.

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