Most bank customers notice small deductions in their account statements but often don’t know why they were charged. These are known as banking charges. While individual charges may seem small, they can add up over time if you’re not aware of them.
In this article, we explain the most common banking charges in India, including debit card annual fees, Average Monthly Balance (AMB), SMS charges, cheque bounce fees, ACH return charges, and more.
Common Types of Banking Charges
1. Debit Card Annual Fee
Most banks charge an annual maintenance fee for debit cards. This fee is usually deducted once a year from your savings account.
- Typically ranges from ₹100 to ₹500 per year
- Premium debit cards may have higher fees
- Some salary or zero-balance accounts offer free debit cards
2. Average Monthly Balance (AMB) Charges
Banks require customers to maintain a minimum balance, known as Average Monthly Balance (AMB). If your account balance falls below the required limit, a penalty is charged.
- Urban branches usually require higher AMB
- Charges can range from ₹100 to ₹600 per month
- Zero-balance accounts are exempt from AMB charges
3. ACH / ECS / Auto-Debit Return Charges
If an auto-debit instruction such as loan EMI, SIP, or bill payment fails due to insufficient balance, banks levy an ACH or ECS return charge.
- Charged when auto-debit transactions fail
- Usually between ₹300 and ₹750 per return
- May also impact your credit score for loan EMIs
4. SMS Alert Charges
Banks provide transaction alerts via SMS, but this service is often chargeable beyond a certain limit.
- Monthly or quarterly deduction
- Ranges from ₹20 to ₹50 per quarter
- Some banks allow customers to disable paid SMS alerts
5. Cheque Bounce Charges
If a cheque is returned due to insufficient funds or signature mismatch, cheque bounce charges are applied.
- Charged to both issuer and sometimes the receiver
- Ranges from ₹150 to ₹1,000 per cheque
- Repeated cheque bounces can attract legal consequences
6. ATM Transaction Charges
Banks allow a limited number of free ATM transactions per month. Exceeding this limit results in extra charges.
- ₹21 per transaction after free limit
- Includes both cash withdrawal and balance inquiry
- Limits vary for home-bank and other-bank ATMs
7. Cash Deposit & Withdrawal Charges
Depositing or withdrawing large amounts of cash may attract service charges, especially beyond free limits.
- Charges based on amount or number of transactions
- Higher charges for non-home branches
- Business accounts usually have higher cash handling fees
8. Account Closure Charges
If you close your bank account within a short period after opening, banks may levy an account closure fee.
- Applicable if closed within 6–12 months
- Charges can be ₹300 to ₹1,000
How to Avoid Unnecessary Banking Charges
- Maintain the required Average Monthly Balance
- Opt for zero-balance or salary accounts if eligible
- Track auto-debit dates to avoid return charges
- Use digital banking instead of cheques
- Review your bank’s schedule of charges regularly
Final Thoughts
Banking charges are unavoidable, but understanding them helps you manage your money better. By staying informed and choosing the right type of account, you can significantly reduce unnecessary deductions and keep more of your hard-earned money.
Tip: Always check your bank’s official charges document or website for the most accurate and updated fee structure.
