How to avoid cash transaction charges?
Are you also addicted to a large number of cash transactions?? Then you need to know how to avoid paying extra levy – cash transaction charges. Cash Transaction charges are the charges that are imposed by the banks if you exceed the number or amount of cash transactions limits in a month. Cash transaction charges are applied on both cash withdrawals and deposits. Cash transaction charges are levied upon consumers to pay up the operating expenses of the bank and uplift the digital economy.
What are the types of cash transaction charges?
- Cash Transaction Number limit: If you exceed a certain number of total Cash transactions in a month you have to pay cash transaction charges.
- Cash Transaction value limit: If you exceed the certain value of total cash transactions in a month. You have to pay cash transaction charges. The Cash Transaction Charges at Home branch fee (Branch where the account is opened or ported) is more than a Non-Home Branch.
- Third-party Cash Transaction: If you involve a third party that is not connected to the seller or buyer (Like PayPal an online payment portal that acts as a third party in a retail transaction). Then you have to pay Cash transaction charges.
- ATM Interchange fee-If you make a transaction at an ATM that does not belong to the card-issuing bank you have to pay cash transaction charges. Currently, the card-issuing bank pays an interchange fee of Rs 15 for each cash transaction and Rs 5 for each non-cash transaction (for example checking balance)
the RBI has hiked the interchange fee per transaction from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions in all centers, effective August 1, 2021
How does a cash transaction charge differ from bank to bank?
Top Indian Banks like HDFC Bank, ICICI Bank, Axis Bank, and SBI bank have different sets of rules and charges levied upon consumers to limit Cash transactions. Cash Transaction Charges are applicable on both salaried and savings accounts.
How can you avoid cash transaction charges?
Here are a few ways to stop you from paying more to the banks in form of cash transaction charges because money saved is money earned:
- Withdraw a larger amount of cash at any ATM. Because every bank charges 10-20 Rs for financial transfers and 5-8 Rs for non-financial per cash transactions.
- Go for Net banking– you can transfer funds through net banking for free. But have to pay (Rs 20- 150) for extra checkbooks. And banks allow only 3-4 free cash transactions in a month
- Clear Credit card bills on time and do not exceed the limit. A Delay of three days could attract charges of up to Rs 750.
- Don’t issue cheques when the balance is low. The minimum charge for cheque bounce isRs 500-750 per cheque plus it’s a criminal offense.
- Maintain minimum balance at all times or downgrade your account: Not maintaining the required balance attracts non-maintenance charges. Up to Rs 10-600 per month and if you cannot maintain the required minimum balance over a period of time then downgrade your account to a simple saving account that has an Rs1000 minimum balance.
- Use Mutual Funds: If you want to withdraw small amounts infrequently basis then you can also opt for mutual funds that come with an ATM facility.
- Upgrade your account to the premium you can maintain their minimum balance. Premium banking facilities entitle accountholder to pay minimum cash transaction charges, unlimited access to third party ATM, free demand drafts, cheaper forex, relationship manager, etc.
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