Here are six ways to avoid paying high service charges levied by your bank
1. Get well versed with the terms and conditions
There are numerous charges that a bank can levy on its customers, depending on the services availed. Singh explained, “In order to ensure that these charges are 100% genuine and unavoidable, the customer is required to be well versed with the terms and conditions of the products and services availed.”
For example, some accounts require an “x” amount that needs to be maintained as a minimum balance at all times (AQB) which is agreed upon by the customer. However, if the customers’ balance falls below the set balance limit, the customer will be penalized.
Singh advised, “The best way that a customer can avoid being charged by their bank is by actually learning more about their bank, and knowing all about the products that they have availed. The terms and conditions should be read before signing the papers and they should also make it a point to regularly visit the website of the bank in order to stay updated on revised charges and offers.”
2. Handle cash transactions smartly
Cash handling charges form a significant part of charges levied by the banks. Navin Chandani, Chief Business Development Officer, BankBazaar.com said, “While transacting from your home branch banks allow you higher limits, but you still have to pay transaction charges, between Rs 50 to 150 per transaction, if you exceed that limit.”
If you can’t do without cash, withdraw larger amounts at a time to avoid paying more.
Kukreja advised, “Those who make higher number of value transactions through their bank account can reduce or eliminate their transaction charges by opting for a premium account from the bank.
3. Keep a watch on your ATM transactions
Now, several banks allow only three to five free transactions, even at their own ATMs. Also, with the introduction to various payment systems, such as digital payment channels and e-wallets, one must also ensure that the predetermined numbers of free transactions at the ATM aren’t crossed.
In the case of ATM usage, while a customer maybe aware that the first three transactions are free, customer may not actually be aware on what or which action actually amounts up to the term ‘transaction.’ Singh said, “Withdrawing alone does not implicate a transaction, as even an act of checking one’s balance or changing ATM pin is considered a transaction.”
Schedule of charges levied by banks
Source: www.paisabazaar.com
4. Study your bank account statement frequently
Anil Rego, CEO and Founder, Right Horizons said, “Some banks have started a bad practice of charging customer fees based on virtual relationship manager service. This banks, do not even take your approval for such added services. They keep charging your bank account, unless you opt out.”
So, it’s important to study your bank account statement about all service charges and fees at regular intervals. Also, take up unwarranted and unsolicited charges with the bank if debited in your bank statement.
Rego added, “If you believe you have been wrongly charged, writing a letter to bank head office sometimes results in waiver. You can also use the social media like the bank’s twitter handle to complain.”
5. Negotiate with your bank on certain charges
Most of the bank charges, such as chequebook charges, ATM charges, etc., are fixed and cannot be customised for different customers. However, what you can negotiate with the bank are annual debit card charges, the interest rate on your credit card, etc.
Chandani said, “You should negotiate for a lower interest rate on your credit card. Your primary bargaining chip here would be your credit score and relationship with the bank. If you have a good credit score and a history of making prompt payments, the bank will consider you as a much reliable borrower and would be willing to negotiate.”
6. Review bank services periodicallyIt’s important to review the bank services periodically. Singh explained, “While a bank service may have a freebie at the time of activation, they are usually deactivated after the offer period. Most of the customers would ingenuously, continue to use the service until they realize that they were being charged for it.”
It is important to know that a bank would always intimate the customer about the updates or alterations in the offers, and they should read all the text messages and e-mail communication by the bank to keep themselves updated on services and applicable charges.
