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10 Ways To Minimize Bank Service Charges

IndianMoney.com Research Team | Posted On Monday, August 27,2018, 04:34 PM

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10 Ways To Minimize Bank Service Charges

 

 

 

For a businessman or a homemaker, every rupee counts. Whether you have a savings bank account or a current account or an overdraft account, you must be aware of bank service charges. This helps you minimize bank service charges.

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10 Ways To Minimize Bank Service Charges

Following are 10 ways to minimize bank service charges:

1. Maintain minimum balance:

 

Banks charge fees on not maintaining a minimum balance. They waive the maintenance fees, if you maintain the pre-decided minimum balance. In 2017-18, 21 public sector banks (PSBs) and three major private sector banks, together collected Rs 5,000 Crores for non-maintenance of the minimum account balance. So, keep your account funded and avoid paying for the non-maintenance of minimum balance fees.

 

2. Downgrade bank account:

 

To avoid paying penalty on non-maintenance of the minimum balance, you can downgrade your bank account to a Basic Saving Bank Deposit Account (BSBD). A BSBD is a zero minimum balance account. However, these accounts come with limits on the number of free withdrawals per month.

 

3. Know the transaction and deposit limits:

Do note that banks impose combined limits on cash transactions vis-a-vis both deposits and withdrawals at bank branches, ATMs or third-party ATMs. You only get 10 free transactions a month including non-cash transactions.

Transactions can be of two types: Financial and Non-Financial. Financial transactions can be payment, deposit and withdrawal. Non-financial transactions can be balance enquiry, changing ATM pin, mini-statements or booking Fixed Deposits. You will be charged per transaction, after you exceed the maximum limit.

Tip: You can save free transactions on withdrawals, by making larger withdrawals. Use mobile banking for non-financial transactions. This will save Rs 10-20 per financial transaction and Rs 5-8.50 per non-financial transaction.

 

SEE ALSO: How Safe Are Your Fixed Deposits?

 

4. Acknowledge bank intimations:

 

Banks intimate you on any hike in service charges, through SMS or emails. Don’t ignore such intimations. Get your email and phone number registered and updated with the bank. Go through bank statements and check for services that you haven’t opted for or certainly don’t need.

 

5. Dishonoured cheques:

 

Dishonoured cheques attract charges of around Rs 500-750 a cheque. Issuing cheques when the account balance is inadequate, is a criminal offence under the Negotiable Instruments Act.

 

SEE ALSO:PersonalLoan vs Business Loan: Which Is Better?

 

6. Credit limit:

 

If credit card usage exceeds your credit card limit, a fee of around 2.5% of the excess amount is charged.

 

7. Don’t withdraw money with credit card:

 

Withdrawing cash with a credit card attracts transaction fees and interest from the very next day. You will be charged 2.5% of the amount withdrawn or a minimum of Rs 300-500.

 

8. Don’t make a request for duplicate physical statements:

 

Make a request for duplicate statements and choose to receive them via email. Banks charge Rs 100 for issuing physical statements.

 

9. Clear credit card dues on time:

 

Just paying the minimum amount due on credit cards may avoid a penalty, but the outstanding amount will attract interest at 24-36% a year. Avoid paying the minimum amount due on credit cards and pay the entire outstanding amount.

 

10. Say goodbye to cheques:

 

Every additional cheque book you request attracts charges of Rs 20-150. Say goodbye to cheques and make transactions through internet and mobile banking.

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