Hidden bank charges and how to avoid them

Why you don’t notice them

Bank charges are usually small, deducted automatically, and labelled with codes on your statement. A few hundred rupees here and there doesn’t feel like much — but over a year, across a couple of accounts and cards, it can add up to thousands. Every bank publishes its charges in a schedule; it’s worth a look once a year.

The common charges

• --Minimum balance penalties — falling below the account’s required average balance.
• --ATM fees — banks allow a limited number of free ATM transactions each month and charge per transaction after that.
• --Debit card annual fees and replacement fees.
• --SMS alert charges — a small quarterly fee on many accounts.
• --Cheque bounce and ECS/NACH return charges — when an auto-debit fails for lack of funds.
• --Foreign currency markups on cards used abroad or on international websites.
• --Credit card late fees and interest — the most expensive of all if you miss a due date or pay only the minimum.

How to avoid most of them

• --Close accounts you don’t use — dormant accounts can quietly attract minimum-balance charges.
• --Consider a zero-balance or basic account for an account you rarely use.
• --Use UPI instead of ATM withdrawals where you can, and plan cash withdrawals within the free limit.
• --Keep a buffer for auto-debits — EMIs and SIPs that bounce cost a fee and sometimes a second fee from the lender.
• --Pay credit card bills in full, on time — set a reminder or auto-pay.
• --Read your statement monthly and ask the bank about any charge you don’t recognise; some are reversed on request.

Frequently asked questions