Many account holders find themselves dealing with extra fees, often without a clear understanding of how they got there. Managing a current account should feel like a tool that supports your business or daily operations. Spotting what triggers these charges can help avoid them altogether. Here are some ways to stay ahead and keep your account running smoothly.
Why do current accounts attract charges?
These accounts handle a high volume of transactions and come with added features like overdraft access, cheque processing and branch support. To manage the cost of these services, banks apply specific terms. As a result, certain charges are associated with maintaining a current account.
The fees are not hidden but unless you’ve reviewed the fine print, it’s easy to miss how quickly they can add up. And they vary depending on the type of account you hold.
Common fees that come with current accounts
1. Monthly average balance penalty
Most current accounts require you to maintain a certain amount every month. Falling short of this can lead to penalties which may range anywhere from ₹500 to ₹1,000, depending on the account type and your location.
To avoid this, keep track of your balance throughout the month and not just at the end. Some banks also send SMS or email alerts when your balance drops below the minimum so make sure you’ve enabled those.
2. Charges for cash handling beyond limits
Banks allow a fixed number of free cash deposits and withdrawals every month. Once you exceed that limit then charges kick in. These are usually a fixed fee per transaction or a small percentage of the excess amount.
If your business deals with regular cash handling then speak to your bank about increasing those free limits. You might also consider switching to a higher tier account to steer clear of recurring costs.
3. Fee on excess cheque book usage
Most banks provide a limited number of complimentary cheque leaves per quarter. Requesting or issuing more than the allotted count may attract a fee for each additional one. Digital payments are a reliable alternative here. They’re faster, traceable and help you cut down on paperwork and expenses.
4. Transaction charges
While many online transfers come at no cost today, some current accounts still cap the number of free NEFT, RTGS or IMPS payments monthly. Exceeding that limit can lead to small fees per any added transfer.
Take a moment to assess your payment patterns. If you frequently use one method then ensure your account includes sufficient complimentary access to that service.
5. Account inactivity and dormant charges
Leaving a current account unused for a long period can turn it dormant. Reactivating it might come with a service fee or require you to visit a branch. Use your account regularly whether it’s a small digital payment or a monthly deposit to keep it active and avoid reactivation hassles.
Smart Ways to Avoid These Charges
1. Choose an account that matches your needs
Banks provide various current accounts tailored for startups, small businesses, freelancers, and corporates. Each comes with unique balance requirements and fee structures. Before opening an account, consider how much money you plan to keep in it and how often you’ll make transactions. Also, think about the types of transactions you’ll use whether in cash, digitally or via cheques.
2. Always review the schedule of charges
Every bank provides a list of charges, typically available for download on their website. It details the fees for services like cheque issuance and SMS alerts. Take a few minutes to review it when opening or updating your account. It’s a simple way to avoid unexpected costs later on.
3. Track your balance regularly
Don’t wait until the end of the month to check if your average balance meets the requirement. A dip in between could pull down your average and lead to a penalty. A quick glance can save you from an unnecessary deduction.
4. Use digital banking
Net banking and mobile apps are not just for convenience but they’re also more cost effective. Most routine transactions like utility payments, fund transfers and vendor payouts are either free or come at a minimal charge when done online. This habit also reduces the risk of cheque related charges and branch visit fees.
FAQs
1. Will I be notified before a charge is applied?
Not always. Some are deducted automatically without prior SMS or email. That’s why reviewing your statement is key.
2. What paperwork do I need to submit to open an account?
Although the documents required for current account can vary depending on the bank. Typically, you need to present your identity proof, address proof, constitution documents, business proof, photographs and bank statements.
3. How do I dispute a charge on my current account?
Banks usually offer easy ways to raise concerns via internet banking, mobile apps or phone support. Act quickly once you notice an issue and keep details like screenshots or reference numbers ready when reaching out.
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