A savings account holder is likely to pay a cost directly or indirectly to use the bank’s services. There are penalties and also service costs that vary depending on the type of account you hold. Major commercial banks generally offer 5-6 types of savings accounts—regular, salary, senior citizens, joint, minor and for women—and give you 4-7% interest per annum. Here is a list of charges that you should know.
NON-MAINTENANCE OF BALANCE
To open a savings account, you have to deposit a minimum amount, unless it is a salary account, where you have a zero balance benefit. The amount ranges between nil andRs.25,000. For some premium savings accounts, it can be as high as Rs.2 lakh. The amount for same bank can vary depending on location. Failing to maintain the minimum balance attracts a penalty of Rs.150-750 per quarter.
Free cash transactions in savings account is limited. For regular savings account, some banks allow five free cash transactions a month. From the 6th one, you have to payRs.100 per transaction. There is also a limit on the number of free deposits at a non-home branch.
CHEQUE AND PAYMENT
With a savings account, you get some cheque leaves for free. But if you need more leaves, you have to pay. For example, an Axis Bank customer would have to pay Rs.50 for every additional cheque book of 20 leaves. You also have to pay if you issue outstation cheques—Rs.25-200 depending on the amount.
DEBIT CARD ISSUANCE
The bank also gives you a debit card, which you can use to pay at a merchant outlet and withdraw money from an ATM. Usually, banks charge an issuance fee and joining fee of Rs.100-750. In case of replacement or loss of card, you would have to pay and an additional Rs.200.
DUPLICATE STATEMENT AND CERTIFICATE
Account statements on bank’s letterhead may be needed for various purposes, say, while applying for a loan or for income tax purposes. If you ask for a duplicate physical statement at a branch, you will have to pay more, as against placing a physical statement request through Net banking. For example, HDFC Bank will charge you Rs.100 for a duplicate physical statement through a branch and Rs.50 if you place the request for it via Net banking or mobile banking. All these charges also attract service tax. From 1 April, service tax will be 15% of charges. Some of these charges can be avoided or reduced in case you use technology to make transaction. If you, say, use a fund transfer platform instead of paying through a cheque, costs will be lower.