Bank charges in India can add up to Rs 2,000-5,000 per year for a regular savings account. Most people never check what they are paying for.
Common charges and what they mean
Annual maintenance charge (AMC) covers your debit card. It ranges from Rs 150 to Rs 750 depending on the card type. Minimum average balance (MAB) charges apply when your average monthly balance falls below the required minimum - typically Rs 5,000 to Rs 25,000 depending on the account type and location.
Transaction charges
Cash deposit charges apply for deposits above a certain number per month, usually 3-5 free deposits. ATM charges kick in after 3-5 free transactions per month from other bank ATMs. IMPS transactions above Rs 1 lakh attract a small fee at some banks.
GST on bank charges
Banks add 18% GST to most charges. You will see separate entries for the charge and the GST. Both are debits from your account. You cannot claim input credit on these unless the account is used for business.
How to reduce charges
Maintain the required minimum balance to avoid MAB charges. Use your own bank's ATMs for most transactions. Consider a zero-balance account if you struggle to maintain minimums. Ask your bank to waive charges you were not made aware of when you opened the account.
Related reading: Savings Account vs Current Account, How to Reconcile Your Bank Statement, Kotak 811 Zero Balance Account Guide.