Banks are the safe haven for parking one’s money and debit cards are a boon to avoid carrying bulky purses and wallets while also ensuring increased saving. However, banks have strict regulations which have been put in place to protect their own interest as well as those of the customer. If the customer breaks any of the regulations they are levied a penalty which can be an expensive affair and eat into the profit you earn in the form of interest when you maintain a balance in the savings bank account.
We discuss here the bad money practices that might invite additional bank fees
Withdrawing Over the Minimum Balance Limit
Although some banks have the option of a zero balance savings bank accounts, there are many private banks that expect the customer to hold a quarterly balance of Rs. 10,000. If the customer fails to maintain the minimum balance in the account, then a fine is levied on it. The quarterly balance system can be slightly tricky since sometimes without realising it, we end up not maintaining the requisite average. It is advisable to leave the requisite minimum balance for a fair number of days so that it gets adjusted with the quarterly balance.
Using Non-bank ATM Machines More Frequently
As per RBI norms, a maximum of five transactions from non-bank ATMs are allowed every month. If you exceed this number, you will end up paying a fee for the same. The transaction can be withdrawing cash, checking balances and changing ATM PIN. Earlier this rule was applied for cash withdrawal alone. The charges levied for cash transaction is Rs. 20 and for non-cash transaction is Rs. 9.
Overlooking Bank Notices
Most banks send quarterly account statements, overdraft notices and other correspondences by mail. It is normal to either throw these mails away or just cursorily put them away in some forgettable drawer. The account statements are required for many purposes such as applying for housing loans, address proof etc. Banks levy charges for issuing duplicate statements and although this can be done over the phone, it is a time consuming process. Of course, for those who use online banking, they can simply take printouts of the account statement. However, a lot of necessary notice arrives from banks which also include lucrative offers which a person must not simply discard.
Forgetting to Update Any Change in Personal Details and Information
Updating personal information such as address and phone number is a tedious process since the new details have to be submitted with relevant proof and an application form at the bank branch. Some banks do offer this facility online as well. Some allow customers to change their phone numbers from the ATM, but public banks do not offer such conveniences either. However, procrastinating in this matter can lead to a lot of problems since you will miss out on bank correspondences and your information may land in the wrong hands, resulting in privacy breach or frauds.
Returned Cheque
If a cheque issued by the customer is not honoured (bounces) and is returned to the bank, then a penalty is issued by the bank. The penalty will depend on the nature of cheque dishonour. If the cheque is dishonoured due to insufficient balance, the penalty is higher and if a third person had issued a cheque in the customer’s name but bounces due to insufficient funds, a lower penalty is levied on the customer. The penalty amount can vary from Rs. 50 to Rs. 750. In many cases, cheque dishonour may also result in criminal cases; hence, it is always advisable to issue a cheque only after checking the bank balance.
Stop Payment
If you make a stop payment request against an issued cheque, the bank will levy charges which can be very high. Some banks do not levy such charges in case of online requests; however, the charges will be levied if you visit the branch.
Account Closure
If you close a bank account within six months to one year of opening, account closure charges will be levied by the bank.
ATM PIN Request
If you misplace or forget your current ATM PIN or it expires as you did not use your card within the stipulated time, then the bank will levy charges for issuing a new PIN. There are no charges levied for changing the PIN at an ATM; however, issue of new PIN may take up to one week and will incur maximum charges of Rs. 50.
Bank charges are easy to avoid if one operates their bank account with prudence. Most of the charges are avoidable if we review our account regularly.