Home Finance Everything You Need to Know About Hidden Charges in Savings Account

Everything You Need to Know About Hidden Charges in Savings Account

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Savings Account

There’s no denying that a savings bank account can help you pool in your finances and manage them efficiently. Be it carrying out day-to-day transactions, transferring/receiving money, online shopping, or paying utility bills, a savings account can be a one-stop-solution for all your banking needs. You can also earn interest on savings account, and this makes it one of the best options to save your hard-earned money. However, before opening a savings account, it’s advisable to learn about the various charges the bank may levy on your savings account. While the type of charges and amounts may vary from one bank to another, some of most common ones are mentioned below:

Non-Maintenance of Average Monthly/Quarterly Balance

Most banks would require you to maintain a monthly/quarterly average balance. If you fail to maintain the minimum balance requirement, banks may charge a penalty for the same. To avoid this, consider opening a zero-balance savings account. With a zero-balance savings account, it’s possible to utilize your funds flexibly without worrying about the minimum balance requirement.

Money transfer charges

A savings bank account allows hassle-free and instant money transfer. However, if you make use of the RTGS/NEFT/IMPS facility for high-value transactions, the bank may charge some amount. While NEFT transactions have no lower limit, RTGS transactions have a minimum limit of Rs. 2 lakh.  Depending upon the amount transferred, you may have to pay anything between Rs. 5 and Rs. 25 for sending money through NEFT or IMPS. Whereas, in case of RTGS, the charges may range from Rs. 30 to Rs. 55.

Cheque bounce charges

The bank may charge a penalty if the cheque issued or deposited by you bounces. The charges may vary from Rs. 200 to Rs. 800 depending upon the bank and the reason due to which the cheque was not cleared. Therefore, before issuing any cheques, make sure that you have sufficient money in your savings account.

Debit Card charges

Banks issue a debit card when you open a savings account with them. They also charge an issuance fee and annual maintenance fee for the same. The annual fee for a debit card may vary from Rs.100 to Rs.700 depending on the card. Banks also charge some amount if you apply for add-on cards for your family members.

Extra cheque-book charges

Banks usually offer a free cheque-book for every quarter with 20-25 cheque-leaves. If you need an additional booklet within the same quarter, you may have to pay for the same. An additional cheque-book can cost anywhere between Rs 50 to Rs 100. However, if you have a premium savings account with a higher average balance, banks may waive off the additional cheque-book charges.

When opening a savings bank account, ensure to make a note of the charges mentioned above. The Reserve Bank of India (RBI) has mandated all banks to mention these charges on their official website. So, if you already own a savings bank account, you can easily check these charges by visiting the bank’s website. Knowing these charges will help you avoid unnecessary penalties and you can use your savings account more efficiently.

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