5 Common Current A/c Charges & Fees You Must Be Aware Of

22^nd Jan 2025...

Managing your current account smartly involves understanding the various charges that come with it. Today, we'll explore the top five current account charges and fees that you need to know about. This will help you do your banking more effectively and possibly reduce costs.

1. Monthly Maintenance Fees

Monthly maintenance fees are common with current accounts, especially if your account balance falls below a certain threshold.

What triggers these fees: Typically, these fees are charged if the account balance goes below the minimum required by the bank.
Avoiding the fee: Maintain the minimum balance, or switch to a bank like Kotak811 that offers accounts without maintenance fees.
Typical charges: The fee can range from Rs. 200 to Rs. 1,000 per month depending on the bank and account type.

2. Non-Maintenance of minimum balance charges

One of the most frequent issues account holders face is the charge for not maintaining a minimum balance.

How it works: If your balance dips below the bank's specified minimum at any time during the month, you'll incur a fee.
Charge range: These charges can vary widely but often start around Rs. 300 and can go much higher based on how much below the minimum you are.
Mitigation strategies: Regularly monitor your account balance via mobile banking apps to keep it above the minimum.

3. Overdraft fees

Overdraft fees are incurred when you withdraw more money from your account than what is available.

Understanding overdraft protection: Some banks offer overdraft protection services that may cost less than traditional overdraft fees.
Fee calculation: The fee might be a flat rate (e.g., Rs. 500 per transaction) or a percentage of the overdrawn amount.
Prevention tips: Set up alerts to notify you when your account balance is low, and keep track of pending transactions.

4. Transaction fees

Certain types of transactions may attract additional fees, particularly if they exceed the number of free transactions allowed by your bank.

Typical transactions: These can include ATM withdrawals at other banks, teller transactions, or certain types of transfers.
Fee examples: Rs. 20 per transaction after the free limit, or Rs. 50 for using a non-network ATM.
How to avoid: Understand the limits and plan your transactions accordingly; use digital payments to reduce physical transactions.

5. Cheque book charges

While digital transactions are on the rise, many businesses still rely on cheques for payments.

Issuance and usage: Banks may charge for issuing a cheque book beyond the first free one or per cheque leaf after a certain number.
Typical costs: Costs can range from Rs. 2 to Rs. 5 per leaf, depending on your bank.
Cost reduction: Use electronic transfers where possible, and reserve cheques for essential payments only.

Conclusion

Understanding these common current account fees can save you a considerable amount of money and hassle. By staying informed and choosing the right bank products you can enjoy the benefits of a current account without the burden of excessive fees.

FAQs

1. What is the best way to avoid current account fees?

You can choose Kotak811 offering zero-balance accounts and current accounts with minimal fees and low balance requirements to avoid current account fees.

2. Can I negotiate the fees with my bank?

Absolutely, you might get fees waived or reduced based on your banking history and average balance; it's worth discussing.

3. Are there any fees for depositing money into a current account?

Generally, no, but watch out for fees on cash deposits exceeding certain threshold limits.

4. Do all banks charge for ATM transactions?

We offer free ATM transactions up to a limit each month; fees apply after you exceed this limit.

5. Is there a way to track these charges?

Yes, keeping an eye on your bank statements or using your bank's app regularly will help you monitor any fees charged.

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.