Tips on how to duck charges and pay less to banks

Apr 30, 2018, 10.04 AM IST

No 'free services'

The country's top banks, including the State Bank of India, HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank, may soon charge their customers for providing 'free services'. This is because the tax department has asked lenders to pay tax on such services provided by them over a period of five years. Given the situation, here are a few ways to stop you from paying more to the banks.

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Agencies

Use ATMs wisely

Several banks allow only five free transactions, even at their own ATMs. If you can’t do without cash, withdraw larger amounts at a time to avoid paying more. You save: Rs 10-20 per withdrawal, Rs 5-8.50 for non-financial transactions.

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BCCL

Switch to Netbanking

Every additional chequebook attracts charges. Transfer funds through Netbanking for free.You save: Rs 20-150 per chequebook, depending on number of leaves.

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Agencies

Clear credit card bills on time

The outstanding amount on your credit card will continue to attract hefty interest rates. You can also set up an auto-debit mandate instructing your bank to deduct a minimum 5% of credit card bill on due date to avoid steep penalty. You save: 39-42% per annum in interest. Delay of three days could attract charges of up to Rs 750.

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Agencies

Don't issue cheques when balance is low

Not only can dishonouring cheques attract charges, it is also a criminal offence under the Negotiable Instruments Act. You save: Rs 500-750 per cheque.

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Agencies

Avoid cash transactions at branches

Banks allow 3-4 free cash transactions at branches in a month.You save: Rs 50-150 per transaction.

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BCCL

Maintain minimum balance at all times

Why: Not maintaining the required balance attracts non-maintenance charges.You save:Rs 10-600 per month.

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ThinkStock Photos

What not to do with credit cards

If your card usage exceeds the credit card limit granted to you, your card issuer will levy a fee for extending this facility. You save: 2.5% of the over limit amount or Rs 500.Also, never withdraw money using credit cards. Issuers levy a transaction fee, in addition to interest payable.You save: 2.5% of the amount withdrawn or a minimum of Rs 300-500.

(Content courtesy: Preeti Kulkarni)