Savings bank account is the most common and the easiest way to keep your money in safe hands. It offers dozen of advantages like simplicity, greater liquidity, safety, enhancement in your bank balance via interest receipts, to name a few. Surprisingly, very few of us are aware of the truth that there are plethora of charges levied by banks on a savings account, some are common whereas there are certain charges that are hidden. Among the common charges are charges for making demand drafts, penalties for not maintaining minimum balance in the account, charges for cheque bouncing.
You will be bewildered to learn about the number of ways through which you are paying hidden charges to your bank and still remain ignorant of such additional burden of charges.
1) Charges for visiting branch – In the fast pace of life, people hardly have time to visit their bank. But still a wide strata of population visits their bank’s branches often. In order to curb the number of visits per customer, these days banks are aggressively promoting net banking, phone banking and are also allowing certain types of transactions through onsite and even offsite ATMs. It is in the personal interest of customers to keep a note of their number of visits to the branch. Banks deduct branch visiting charges from your account for transactions conducted through branch which are beyond a specified number. Banks justify these charges on the premise that whatever a customer visits the branch, it burdens the bank in terms of additional expenses.
2) Charges for standing instructions – In an endeavour to avoid the botheration of making recurring transactions, people often set up a standing instruction with their bank to debit their account by a specified amount on a particular day of every month/ quarter and transfer the money to the mentioned account. For example – payment of rent EMI of Rs. 4,000 to be deducted on 10th of every month. Such a provision is chargeable by bank. Bank charges for both – setting up a standing instruction and for each transaction commensurate with the instruction. Different banks have different rates for this service.
3) Charges for ATM transactions – First understand that a single visit to an ATM does not necessarily count as one transaction. For example – you checked your bank balance, printed a mini-statement and then withdraw a sum of money, this entire activity will be looked upon as three transactions. Usually, every month first five transactions on ATMs other than your banks ATMs are free of charge. Beyond this number, you will be charged for each transaction carried through machines of other banks.
4) Charges for getting a new ATM card – A request for replacement of an old ATM cum debit card, in case of loss or mutilation of the old one, is chargeable from your account. In case, you forget your pin and request the bank to re-generate a new pin for you, then there are certain banks who charge for this as well.
5) Charges for account statement – If a customer asks for a statement other than the usual monthly or quarterly statements provided by the banks, then the service is chargeable. Even if you ask for additional credit card statement, you will have to incur expenses. HDFC for example charges Rs. 125 per additional statement for its credit card.
6) Charges for e–mail/ sms alert service – In case you do not feel the necessity of getting e-mails/ sms alerts for each transaction, then it is better to request your bank to stop this service for your account. This service entails cost to you. ING Vysya Bank charges Rs. 31 per month for this service.
7) Charges for cheque books beyond quota – Banks allow certain number of cheque leaves to each of its customers. Demand for additional cheque books attracts charges.
8) Stop payment charges – Suppose, you have issued a cheque to somebody and later realizes that you should not in fact sign that cheque or accidentally have written wrong or excess amount and now, you cannot get hold of that person. The best remedy in this case is requesting your bank to stop the payment against that cheque number before it is honoured. This way you can reduce your loss but be vigilant as this service is not free of cost.
9) International usage of debit card – Whenever you use your card internationally, bank incurs a cost and they recover it by debiting your account.
There is nothing called free in this world of banking. You keep on asking for more and more services from your bank and your bank will keep on debiting your account. To reiterate, weigh your options and choose your banking services accordingly. After all, a penny saved is penny earned.
