Bank charges you should know about

Minimum balance fee

It is charged when the account holder fails to maintain the minimum balance in his or her account. The RBI permits banks to fix penal charges regarding non-maintenance of minimum balance in savings accounts. In case of salary account, many banks offer zero balance accounts.

Online banking fee

Many banks still charge for online or remote banking services. Online banking isn’t something that can be avoided since it gives you the flexibility and convenience of accessing your account 24/7.

Overdraft fee

If you withdraw money from the account when there are insufficient funds for the transaction, your transaction is covered by an overdraft. However, you are charged a fee for every overdraft.

Duplicate statement fee

If you ask for a duplicate statement, the bank might charge a small fee for it. The fee is justified by the cost of paper and the printing of your statement receipt.

Debit card fee

Many banks also charge customers annually for debit cards. Usually, banks charge multiple types of fees for debit cards like charges for issuing a new card after the expiry date or in case the card gets lost.

ATM transaction fee

Depending on your bank’s policies, this is charged for every transaction or after a specific number of transactions. Banks might charge this fee for excessive transactions and transactions after you have crossed your free usage limit.

Insufficient funds

Insufficient funds fee is charged when you don’t have enough money in your account to cover a purchase and the bank rejects the transaction. For example, if your EMI or SIP is rejected on account of insufficient funds.

Loan processing fee

The bank may charge for processing and sanctioning loan. Every bank fixes a minimum and maximum percentage of the loan processing fee which the borrower must pay. You can either choose to pay this fee upfront or have it deducted from the loan amount.

Verification charges

Before a bank can sanction your loan, it needs to have an assurance that you have the capacity to repay the loan. To this effect, it hires an external agency to get your credentials verified, which is an added cost. This cost is regarded as a verification charge, which is borne by the borrower.

Prepayment charges

If you pay off your debt before the stipulated tenure, the bank may charge you a prepayment penalty. Typically, a bank will charge a small prepayment or foreclosure fee of 2-4 per cent.