Banks across India are currently in a state of frenzy. They have been asked to pay the ‘free services’ tax provided to customers with a minimum account balance with retrospective consequences. The tax could flow up to thousands of crores. The DGGST has already given a notice to banks to adhere to this rule. To deal with the issue, banks could soon start ATM transaction charges, tax for cheques and cards etc. Given the situation, here are some ways on how to pay less for bank services.
How to pay less for bank services?
There are many ways which show us how to pay less for bank services. The following points explain how to do it:
Shift To Netbanking:
Chequebooks attract additional charges. Netbanking facilitates the transfer of funds free of cost. Through netbanking, a person can save at least Rs. 20-150 per chequebook.
Demote Your Bank Account
If a person is not able to maintain a minimum balance requirement, then he or she can go for a Basic Saving Bank Deposit. But this kind of accounts has restrictions. For example, SBI permits only four free withdrawals in a month.
Use ATM Machines Cleverly
Many banks permit only five transactions per months (including their own ATM machines). So to prevent deduction, a person needs to withdraw larger amounts of cash within the permitted transaction limit, so in that way you save Rs. 10-20 per withdrawal.
Sort Out Credit Card Bills On A Timely Basis
A clever way to pay less for bank services is to sort out the credit card bills on a timely basis. The outstanding amount attracts hefty interest rates. A person can facilitate an auto-debit mandate instructing the bank to deduct a minimum 5% of credit card bill on the due date to prevent the steep penalty. Moreover, through this, a person can save up to 39-42% per annum in interest.
Cheques Should Not Be Issued During Low Balance
Cheques that are returned unpaid by the bank due to insufficient funds attract charges (and is also a criminal offense). If prevented, a person won’t lose Rs. 500-750 per cheque.
Cash Transactions Should Be Avoided At Branches
3-4 free cash transactions are allowed by banks at branches at a month. If followed, a person can save Rs. 50-150 per transaction.
Maintain Minimum Balance Always
If a customer doesn’t maintain his or her’s required minimum balance, then it leads to non-maintenance charges. If minimum balance is maintained, a person can save up to Rs10-600 in a month.
Credit Limit Should Not Be Exceeded
If a person’s credit card crosses the permitted limit, then the card issuer levies a fee for the extension. So if this is prevented, then a person can save 2.5% of the over limit amount.
Bank Alerts Should Not Be Ignored
All of us receive messages from our banks, and we usually ignore them. It is best not to ignore so that such notices don’t come out of the blue to us.
Charges are going to vary depending on the bank, branch, account, and location. The new ruling doesn’t really affect the banks much but actually affects the customers who will have to bear the brunt. The charges seem to be less, but amounts to a lot in the long run.