Hidden bank fees can often creep up on you, silently eating away your hard-earned savings. One moment you're merrily enjoying your monthly salary, and the next, you find that your bank has charged you for services you didn't even know existed! If this sounds familiar, then you're not alone.
From ATM fees to account maintenance costs, banks have numerous fees you need to be aware of. But don't worry; in this comprehensive blog, we're diving deep into the types of bank charges, how to steer clear of them, and most importantly, how to keep your money where it belongs - your bank account! Happy reading!
Types of bank fees & charges
While you enjoy the convenience and security that comes with banking services, it's crucial to know the types of fees that can be levied against your account. Awareness is the first step towards prevention.
ATM Fees
ATMs are your best friends when you need cash, but using an ATM from a different bank can cost you.
Out-of-Network ATM Fee: If you withdraw money from an ATM not belonging to your bank, you may be charged around Rs.20 to Rs.50 per transaction after exceeding the number of free monthly transactions.
Overdraft Fees
Overdrawing from your bank account can be slippery terrain.
Per-Item Overdraft Fee: Banks charge a fee of Rs 500 to Rs 800 for each transaction that overdraws your account.
For instance, you miscalculated your account balance and made three purchases, leading to an overdraft. You could be charged Rs 600 per transaction, totalling Rs 1800 in fees.
Account maintenance fees
Just as the name suggests, these fees are levied towards the maintenance of your account. You can often get this removed by maintaining a certain balance in the account.
Quarterly Maintenance Fee: Most banks charge around Rs.750 to Rs.1000 every quarter for maintaining your account.
For instance, Suresh was surprised to find a quarterly charge on his statement. He called customer service and learned it was an account maintenance fee. Upon inquiry, he discovered that maintaining a certain minimum balance could waive this fee.
Must Read: How to Find Your Bank Account Number?
Service Fees for Special Requests
Sometimes, we require bank services that are out of the ordinary and come at a cost.
Cheque Book Request: You might be charged for a new cheque book. This usually happens when it's beyond the number of free cheques the bank issues yearly.
Credit Card Charges
There are several advantages of using a credit card, but it comes with its own set of charges.
- Annual Fee: Most credit cards come with an annual fee ranging from Rs 500 to Rs 5000, depending on the benefits offered.
- Late Payment Fee: If you're late in paying your credit card bill, you'll be charged a hefty fee that varies depending on the outstanding amount.
For example, if Vivek paid his credit card bill two days late, he could be charged Rs 600 on his next statement. To avoid this in the future, he should set up automated bill payments from his account.
How to avoid service charges?
Let's delve into some practical steps.
Go digital
Consider opening a digital account online, usually free of cost. For example - a Kotak811 digital savings account can be opened with zero balance. What's more, it helps you earn FD-like interest of up to 7% on your deposits when you activate the ActivMoney feature.
Use your bank’s ATMs
As mentioned earlier, using ATMs that belong to your bank network can save you money. If you must use another bank’s ATM, withdraw larger amounts to minimise the frequency of transactions and thereby reduce charges.
Set up alerts
Use your bank’s mobile app to set up balance and transaction alerts. These will notify you when your account is about to be overdrawn or when a charge is applied.
Switch to a no fee bank
Several financial institutions like Kotak Mahindra Bank offer zero balance or no fee accounts. Consider opening a Kotak 811 online digital account with zero balance and no hidden charges.
Final tips
Being a vigilant customer is half the battle won. Here are some final pointers to keep in mind:
- Regularly check account statements: Often, bank fees are mentioned only in your bank statements. Ignorance is not bliss here.
- Update our information: Make sure your bank has your current mobile number and email address so that you receive all alerts and updates.
- Research before choosing a bank: Don’t just be swayed by freebies. Look at the fee structure, as this will impact your finances in the long run.
- Don't ignore mailed or emailed notices: These might contain information on fee revisions. Make it a habit to read any communication from your bank.
Must Read: Are You Getting Monthly Interest Credited?
Conclusion
In an age where every penny counts, falling victim to unnecessary bank charges can be frustrating. However, by understanding the types of bank charges and taking proactive steps, you can avoid these fees and save significant money. With a little care and strategic planning, you can navigate the maze of bank service charges and keep your finances intact. Be alert, be aware, and don't let those charges catch you off guard!
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