Reducing Bank charges

While going through bank statements, one will often come across charges levied on regular banking transactions. If the account holder knows that if he uses an alternative mode for availing certain banking services, he can either do away with or minimize these costs. In this article we are giving few suggestions as to how to reduce the banking charges.

Bank levies charges on a number of routine transactions of the Account holder. There are a number of simple ways in which one can reduce or even avoid having to pay these.

Almost all services that a bank provides come along with a price tag. Right from a Demand Draft (DD) request, account statements by courier, stop payment instructions, check book request, duplicate account statements, etc. attract charges in the case of most banks. The quantum of charges varies from bank to bank. Along with all these charges, a service tax of 12 per cent and an education cess of 3 per cent is also levied which pushes the cost further.

While phone and internet banking are faster and secure modes of conducting ones banking transactions, they are also cheaper. By using these modes for routine banking tasks, one can save on costs. For instance, while a physical account statement delivered to doorstep comes at a cost in the case of a number of banks, if one opts for a statement via email, one can avail of the same for free. Similarly, if one submits a stop payment instruction at his bank branch, one is most likely to pay a higher charge than if he had given the stop payment order via the phone or internet banking mode.
ICICI Bank charges Rs 50 per check for stop payment instructions given manually at the branch. However, the same request given through the internet comes free of cost. Similarly, in the case of HDFC Bank, the charge for stop payment is Rs 50 if one visits the branch and Rs 40 through the phone banking channel. The bank charges Rs 100 for the issue of duplicate or random statement, if one gives the request at the branch or through phone banking. For the same transaction, the charges go down to Rs 50 if the request is placed online via an ATM or through mobile banking. Also, in case of DD request at branch a bank may charge Rs 50 to 75. The same charges come down to Rs 30, if the request is made through net banking route.

It is true that a number of banks have reduced rates for certain transactions conducted via phone, mobile and internet banking. However, one needs to check out whether the bank actually offers different charges through different routes.

The difference in charges is more prevalent in the case of private sector banks, than their public sector counterparts.

A Bank’s website can give the list of charges and the options available on all the transactions. A majority of banks have a separate section for service charges and fees on their website. One can choose the most cost effective option. In case if the bank’s website does not give sufficient details, one can call the customer service center or the phone banking number to get more clarity on these charges.

The difference in charges may seem to be minuscule and one might choose to ignore it. However, if one adds service tax and education cess, the amount one has to shell out will be much higher and also if the yearly transactions are taken into consideration.