Know all the fee your bank charges you, be a smart saver

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It so happens that many customers are charged several small amounts of miscellaneous fees from their banks and pay these numerous fees that ultimately add up to be quite a large chuck. But what is strange is most customers do not even realize what they are paying for or why a certain penalty fee crops up every once in a while. In this article we will go over some of the common miscellaneous fees, why banks charge them and how to avoid a few common penalties with a few disciplinary actions.

Some common reasons why banks charge additional fee from customers:

  1. Over-usage of ATM fee: Are you one of those people who depend on their ATMs for regular cash withdrawals and balance inquiry? Then you could be paying a fee for over-using your ATMs. A new set of guidelines from the Reserve Bank of India dictates that if an ATM is used for more than 5 times in a month then a penalty deduction of INR 20 will be done on subsequent transactions using the same ATM card in the same month. So, for the 6th transaction you will lose 20 rupees from your account as penalty, for the 7th one you will lose 20 more so a total of 40 rupees will be deducted from your account by now, and so on. And if you are a metro-city dweller in the cities of Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad then, you are allowed only 3 ATM transactions of other banks, more than which will cost you. Hence, it is advised that you rely on mobile banking or net banking more than ATM transactions to avoid penalties.
  2. Non-maintenance of minimum balance: many banks require their customers to maintain a minimum balance in their savings bank accounts, and if one fails to do so often a penalty is charged. You can find out the minimum balance criteria for your bank at the bank’s website as well as the account opening kit. Penalty may also be charged if you do not maintain MAB (monthly average balance) or a minimum quarterly average balance (QAB) according to the bank’s requirements.
  3. Penalty on inactive accounts: often people keep their accounts dormant with no inward or outward flow of cash. In such cases banks can often bracket such accounts as dormant or inactive and often charge some penalty for that account even if there is money in the account. Usually accounts which have been inactive for 24 months i.e. 2 years are deemed inactive and usually a penalty is charged on them. This charge could be anywhere between INR 50 to INR 200 in a year.
  4. Cheques getting dishonored can charge you with penalty: often banks levy penalties on account holders if their checks get dishonored for any reason. The amount of penalty usually varies from bank to bank and will also differ depending on local checks or outstation ones. So, it is better to be careful when signing checks so that all the designated details are filled properly as per the bank’s requirements to avoid penalties and some best avoided extra headache.
  5. Extra charges on duplicate statements: even now many take to the old traditional ways of knowing their account balance and previous transactions from the bank by acquiring a duplicate statement. But banks nowadays deduct penalties for duplicate statements. Thus changing the old ways of doing things it is better one checks their account statement and previous transactions with added convenience and use net banking for getting statements. As for duplicate statements banks these days charge up to INR 100 for every duplicate statement.

While some of these charges seem somewhat excessive but banks are well within their rights to charge for the services they offer their customers and one can easily avoid these extra fee if they maintain the minimum amount of financial discipline and keep track of their financial duties.

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