A savings account is an essential financial product in this day and age. However, before you open an account, one of the most important things that you need to be aware of is the set of savings account charges levied by banks.
Although the exact list of fees and charges on savings accounts varies from one bank to the next, it’s essential to be aware of the common charges typically prevalent in India. Here is a closer look at the fees you may have to pay for your account, depending on how you use it.
Charges for Non-Maintenance of Average Monthly Balance (AMB)
The average monthly balance is the minimum closing balance that you need to maintain on average each month. If there is a shortfall, the bank will levy charges for non-maintenance of the AMB. These savings account charges vary based on the shortfall.
To Avoid These Charges:
Ensure that you maintain the average monthly balance required by your bank.
Charges for Issuing Bank Passbook/Statement
Banks may also levy fees for savings account holders who request a physical copy or a duplicate copy of their passbooks or bank account statements. Generally, obtaining an original soft copy of the passbook or bank account statement is free. However, for duplicate requests and for requests of physical copies, specific charges will be applicable.
To Avoid These Charges:
Always opt for a soft copy of the passbook or bank statement when possible, and keep these documents safe.
Cheque Book Charges
Most leading banks offer free cheque books at periodic intervals. These free cheque books typically have around 20 cheque leaves. If you need more cheques, you can place a request with your bank and obtain the same. However, the bank may levy additional cheque book charges in this case. That said, in the case of some premium accounts, these savings account charges may be waived by the bank.
To Avoid These Charges:
Try to keep your cheque books safe and balance cheques with other payment modes. However, you may not be able to avoid these charges if you make several payments via cheque.
Cheque Bounce Charges
These fees are levied if you have issued a cheque for any payment, and it bounces due to insufficiency of funds in your account. Cheque bounce charges may also be levied on bounced cheques issued by a third party, but they are often lower in such cases.
To Avoid These Charges:
Ensure that you have sufficient funds in your savings account before you issue a cheque.
Debit Card Charges
Today, all leading banks offer debit cards to savings account holders. These cards may come with an issuance fee and/or an annual maintenance fee. If your bank offers a debit card when you open an account, make sure you are aware of such savings account charges on the debit card, if applicable.
To Avoid These Charges:
While these charges cannot be avoided, you can compare the account options offered by different banks and choose a provider that does not levy these charges.
Fund Transfer Fee
When you open a savings account, you also get access to the provider’s internet banking portal, through which you can initiate different kinds of fund transfers like NEFT, RTGS and IMPS. The bank may levy nominal charges on these transfers, particularly for large-volume transactions.
To Avoid These Charges:
These charges are also unavoidable. However, you can plan your fund transfers in such a way that each transfer is within the free threshold limit.
Cash Transaction Fee
Most banks today offer a certain number of free cash transactions each month. However, banks may levy cash transaction fees on savings account holders who exceed the permitted number of free cash transactions during a given period.
To Avoid These Charges:
Avoid making cash transactions beyond the permissible limit and opt for other online payment modes instead.
These are the common savings account fees and charges that you should be aware of. That said, keep in mind that the exact types of charges and the amounts levied will vary from one bank to another. They may also vary from one type of account to another offered by the same bank. This is why it is crucial to read the fine print for your specific savings account carefully.
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