Most of the Bank Charges are almost unnecessary. Thus looking for various mitigating tips is the need for the same.
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A few days ago, I had to file the yearly income tax returns of my firm. I had arranged all the requirements for the same. What is left were the bank transaction details of that financial year As per the guidelines the branch should update the account passbook after every transaction to ensure we have paper proof. But that was not the case then. The staff at the branch was not updating the passbook. The reason they claimed is that the printer has failed and a new one has not arrived.
This continued for months together and this day when I needed a year’s financial transaction list, I had nothing in my hand. I visited the branch to address the same and get the passbooks updated. But the same answer came from the other side.
I asked if there was any other way that I can get the transaction list to put up in the return filing process. The person on the other side of the table took no time to suggest that they can provide me a print copy of the transactions attested by the branch manager but they would charge for the same.
I was shocked at the statement. Why should I be charged for the mistake they have committed? The same question rang in my mind for a long time. I thought and later decided to pay the same as I was the one who would suffer later. Later one of my friends from banking background suggested that I shouldn’t have waited for months together to update, rather I should have complained in the initial stage itself.
This instance motivated me to look into various ways how banks charge innocent customers under the roofs of various names and reasons. After some research, I’m here to suggest few areas where we can actually mitigate bank charges. Let us look into the same in the upcoming lines.
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Common Bank Fees
We can easily segregate various charges of banks. There are some common banking fees to which almost everyone is exposed.
1. Monthly Maintenance Fees
In the past decade, a new trend in the banks has emerged. Many banks have started to charge fees to maintain accounts with their banks.
How?
Today many banks started to offer minimum balance accounts with a notable amount as a minimum balance. For instance, a bank is offering accounts with a minimum balance of Rs 5000.
For people who deal with large amounts, this would not affect as such. But for people like housewives, who just want to save some money and want to spend all of those sometime, this is a big blow.
Other additional charges in this context are the charges for using debit cards more than the limit specified.
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2. ATM Fees
The most pinching part of the banking charges in recent times is the ATM charges. The introduction of ATM systems in India added to the comfort and took the banking services to the next level. People began to use cards for payments thus starting an era of cashless transactions.
But in recent times, restrictions for usage of cards have been put into practice by banks. In the initial days, the monthly limit for the usage at other ATMs was 5, but in recent times it is reduced to 3. This means that one person can transact only 3 times for another bank’s ATM for free. Later every transaction will be charged.
Now people who got quite acquainted with the usage of ATMs started facing problems. People started getting charged for additional transactions of their cards.
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3. Overdraft Fees
Another exploiting fee is the overdraft fee. In simple words overdraft fees is the amount charged for payment or withdrawal from a bank account that exceeds the available balance. These are the fees for the charges covered by the bank for a certain amount of time.
Why is this fee exploiting?
Banks get the maximum out of the customers in the name of fees. Once, I had to pay some debts and I had a shortage of Rs10, 000. I decided to transact cash in credit card from ATM. The rates of charges were not known to me. Later when I got the credit card bill, I noticed that I have been charged Rs 500 for the transaction.
I had paid the credit card bill after 15 days of the transaction. This means that the bank has charged 5% of the principle for just 15 days of the transaction.
Let us understand how high the price is for money lent to a needy customer. This is a clear example that shows how customers are exploited in the name of charges.
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4. Check reprinting Fees
Checks are to be issued in the name of the account holder by the bank. But when they come out with some mistakes, these need to be reprinted. Now, the sad fact is that some banks charge additional fees for the reprinting of these checks. This may add up to the pain of the customer.
Sometimes bank even charges for the check printing in the branch.
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How to avoid these fees
To look into this aspect, we can take care of various levels and steps. Let us check out the same in the upcoming lines.
1. Pick the Right Bank
Most of these complications that we saw in the previous lines can become over by the selection of the right banks. In India, some banks are diverse when we look into the offerings they have. Some banks have lesser rates of interest on their loans, while some offer good interest rates for savings. Some banks are private and some are public. Thus an individual should check out all banks that are available before they start their journey with them. For instance: CITI bank still offers unlimited free transactions for their card users. But this bank may not suit all people as its presence is limited to cities and bigger towns only.
For instance: if one tends to take loans regularly, then he/she should opt for such a bank that offers loans at lower interest rates.
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2. Consider ATM Location and Fees
As the usage of ATM cards is also restricted, not location as well as the fees need to be considered. Sometimes online banks can turn to be the answer as it doesn’t have branches and doesn’t charge for their ATM transactions.
For instance: CITI bank still offers unlimited free transactions for their card users. But this bank may not suit all people as its presence is limited to cities and bigger towns only.
Another suggestion is that one can use UPI payments systems instead of ATM transactions. This would save time for withdrawal and makes the transaction process yet simpler.
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3. Manage Money
Last but not the least; one must be the best in money management always. In contrast to what many people think; managing money doesn’t mean putting all of them in the bank. Rather one should be aware of various areas to invest in and save their finances for better returns and management. Some of the common alternatives would be investing in real estate, chit funds, etc.
One should actually divide their savings into ratios based on their investment type. The best suggestion is 50-20-30.
Bottom Line
The idea behind this article is clear by now. One should be careful in all the transactions of the bank to mitigate unwanted fees they charge. This may seem small sometimes, but carefulness in these small instances can give rise to an unexpected profit in the future.
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Nice Info
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