Yahoo! My Yahoo! Mail More Make Y! My Home Page New User?

Sign Up Sign In He

Search WEB SEARCH

Indian Markets Closed. Tue, Feb 24, 2009, 4:24PM IS

Home > Personal Finance > Loans > Basics & Features > Article
Related Links Source: Business Today
Sunday January 25
Glossary
The charge machine
All Personal Finance
Banks have hiked various charges and, in some cases, introduced new ones like
Home counting charges on a large cash deposit or withdrawal. Here's what you should
Basics & Features know.
EMI Calculator
The business and saving bank accounts that Chennai-based V. Selvakumar (30),
News maintains with State Bank of India, ICICI Bank and IndusInd Bank have been giving
Mutual Funds him the blues for the past 24 months. Many banks have hiked various charges and, in
some cases, introduced new ones like counting charges on a large cash deposit or
Home
withdrawal. As his transactions were many, Selvakumar was informed by one of his
Basics & Features banks that it will not be able to issue so many cheques for free and that he would
News have to pay additional charges for them. At times, he forked out counting charges to
withdraw his own cash, and large transfer charges to remit money to another city.
Taxes
Little wonder, the Coimbatore-based fastfood joint owner is perturbed. The banks say
Home
Basics & Features
we are getting personalised banking, but it's the banking charges that are getting
Basics & Features personalised, he says.
Things to remember about your personal loan
News
Welcome to high-cost banking. Banks are increasingly finding new ways to make you Loan sharks of the digital era
Insurance pay for their services. Even for a basic service, such as requesting an additional
Why NPAs matter
Home account statement, banks may charge a fee of Rs 250-500. You also have to pay
extra as cheque-issue charges when your account slips below the stipulated minimum The charge machine
Basics & Features
balance. Then, banks have hiked charges for bounced cheques, and cheque
News » View more basics & features
Loans collection in the last year. One good news is that cash withdrawal from any ATM will
be free of charges from April 1, 2009.
Home
Basics & Features Topics
EMI Calculator
1. Fees or fleece? How banks charge you more
News 2. The issue of fees
NRI Corner 3. How to Lower the Burden

Home
Fees or fleece? How banks charge you more
Basics & Features
News Minimum balance: If you don't maintain a minimum stipulated balance in your bank
account, banks will charge a hefty fee. Lately, many private banks have hiked the
quarterly average balance (QAB) requirement from Rs 5,000 to Rs 10,000 per quarter
while some foreign banks have a higher QAB requirement. This charge is steep and
varies from Rs 750 to Rs 1,500.

Chequebook: Banks usually provide chequebooks free if you use less than 10-12
leaves per quarter. If you need more cheques or have an urgent requirement for an
additional chequebook, banks charge Rs 50-300 per chequebook.

Cheque return charges: Among the most expensive fees is the bounced cheque
charge. A few private banks have lately hiked this charge from Rs 250 to Rs 350.
Account statements. All banks have to provide free quarterly statements. If you
require more statements or a duplicate statement, the charges vary between Rs
50-500 per statement.

ATM charges: If you use the ATM of another bank for cash withdrawal, you will be
charged Rs 20 per transaction. This service, however, will turn free from April 1, 2009.

Debit card fees: Banks should usually offer ATM cards free, but many have stopped
issuing ATM cards altogether. Instead, they issue a combo ATM-cum-debit card, for
which they charge Rs 100 per annum.

Other charges: Banks also charge you for outstation cheques clearing, demand
drafts and stop-cheques. These charges attract a further service tax of 12.3 per cent.

The issue of fees

For banks, fee-based income is an important source of revenue. Besides, transaction

costs have increased thanks to the costs incurred on deploying core banking
software, installing ATMs and the rising delinquencies or nonperforming assets.

Before you open an account, look up the charges mentioned on the bank's website. In
general, large, new-generation private sector banks charge more than smaller private
banks and public sector banks. Almost all offer facilities such as Internet banking,
demat accounts etc., and so a bank that has a responsive help desk should be
considered you can then compare the charges of the banks in your vicinity.

On the other hand, some services could be crucial for your requirement. If you prefer
cheque pick-up, cash pick-up and drop facilities, opt for a bank offering home banking
facilities. Be prepared to have a large minimum deposit in your savings account. Most
banks offer a sweep facility where idle cash gets transferred to flexi-term deposits
earning higher interest. Some services are reserved for high networth individuals,
such as trust and estate planning, for which the charges are quite high, but vary
between banks. Says K.V.S. Manian, Group Head Retail, Liabilities, Branch Banking,
Kotak Mahindra Bank: Customers require need-based services, so transaction costs
are there to stay.

Online banking, with the RTGS (Real Time Gross Settlement) and NEFT (National
Electronic Funds Transfer), which have rates stipulated by RBI, are enabling smaller
banks to compete better with their large counterparts, and fare much better on overall
charges as well as an array of services, such as bill payment facilities. Please note,
an ECS debit with your utility provider could be a cheaper option.

Some banks also provide a no-frills or zero-balance account with cheque facilities, a
great idea for people with average banking transactions. (You may not get a multi-city
personalised chequebook, though, but then, you may not need this). But watch out for
not-so-openly stated caveats. State Bank of India, for instance, demands a fixed
deposit of Rs 5 lakh in Coimbatore to give you a locker, says J. Karthikeyan, Certified
Financial Planner and Director, Finerva Financial Solutions.

At the end of the day, decide on the services you want and match those with the
bank's ability to fulfil the same efficiently that will ensure you don't cry all the way from
the bank.

How to Lower the Burden

Avoid banks that require you to maintain a hefty balance in savings account.
Sign up for low balance alerts.
Bank online wherever possible. This feature generally has zero or very low
fees.
Maintain all your bank statements, and keep a copy to avoid additional charges
for duplicate statements
Don't maintain too many bank accounts as keeping track will be difficult.
Don't sign up for any service or transaction unless you know the cost involved.
 If a service is free, check its service tenure.
Don't sign on a cheque if you are unaware of the outstanding balance.
Bounced cheque charges have increased.
Don't hesitate to negotiate your transaction fees with the bank. Banking is a
competitive business, and banks will be willing to lend a helping hand.
Reproduced From Business Today. Copyright 2009. LMIL. All rights reserved.

Email to friend IM to friend

Icici Bank Starting a Web Business? Online Trading Made Easy

Banking from cash management to Create and manage your website. Benefit Trade Stocks with Research Tips & Stock
acquisition financing. Learn more. from the latest technology. Alerts. Geojit Aids Growth.
ICICIBank.com www.zoyid.com www.Geojit.com

Explore Yahoo! Finance on Mobile

One Search Yahoo! Go SMS WAP

Cricket Movies Lifestyle

All about records Rahman: The right no Destination Dharavi
No figure can today be Rahman scripted history by Did you know that post
considered a barrier and it becoming the first Indian to win 'Slumdog Millionaire', Dharavi
would come as no surprise if 2 Oscars. Take a look at his is one of the hottest tourist
the marks set by Sac... » More journey to ... » More destinations thi... » More

Copyright © 2009 Yahoo India Pvt Ltd. All rights reserved. Copyright/IP Policy - Terms of Service - Help - Feedback
NOTICE: We collect personal information on this site. To learn more about how we use your information, see our Privacy Policy

Quotes delayed, except where indicated otherwise.

Delay times are 15 mins for BSE and NSE(when not logged-in) See also delay times for other exchanges.

All information provided "as is" for informational purposes only, not intended for trading purpose s or advice. Prior to execution of any security trade, you are
advised to consult your authorized financial advisor to verify the accuracy of all information. Ne ither Yahoo! nor any independent provider is liable for any
informational errors, incompleteness or delays or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not
to redistribute the information found herein.