Bank Account Charges Explained in India Complete Beginner’s Guide (2026)

Bank Account Charges Explained in India Learn all bank account charges in India, including minimum balance penalties, ATM fees, NEFT/RTGS/IMPS charges, overdraft costs, and practical tips to avoid unnecessary banking fees.

Introduction: Why Knowing Bank Account Charges Matters

Every bank account in India comes with certain fees and charges. Yet many account holders end up paying more than necessary—not because banks are unfair, but because the rules are often ignored or misunderstood.

Understanding bank account charges in India is essential if you want to:

• Avoid unnecessary penalties

• Save money on routine banking

• Manage your finances more efficiently

Whether you hold a savings account, current account, or zero-balance account, knowing which charges apply—and how to reduce them—helps you keep more of your hard-earned money.

This beginner-friendly guide explains all common bank charges in India, how they work, real-life examples, and practical ways to minimise costs in 2026.

Quick Start Checklist: Must-Know Bank Charges

Before we dive in, make sure you know:

• ✅ Your account type (Savings, Current, or Zero Balance)

• ✅ Minimum balance rules and penalties

• ✅ ATM withdrawal limits and fees

• ✅ NEFT, RTGS, and IMPS charges

• ✅ Overdraft and cheque-related costs

📌 Pro Tip:
Tracking bank charges regularly can save you hundreds to thousands of rupees every year.

1. Common Bank Account Charges in India

Banks charge fees based on account type, usage, and transaction method. Here are the most common ones beginners should understand.

a) Account Maintenance & Minimum Balance Charges

Most savings and current accounts require maintaining a minimum balance.

• If your balance falls below the required limit, a penalty is charged

• The penalty amount varies by bank and account type

Example:
If your savings account requires ₹5,000 and your balance drops to ₹3,000, the bank may charge a penalty of ₹100–₹500 for that month.

👉 This is one of the most avoidable bank charges if you plan your balance properly.

b) ATM Withdrawal Charges

• Banks usually allow 5–10 free ATM withdrawals per month

• Charges apply after the free limit is crossed

• Using another bank’s ATM may reduce free limits

Typical charges: ₹20–₹50 per extra withdrawal

c) Cheque Book Charges

• Banks provide a limited number of free cheque leaves

• Additional cheque books or demand drafts attract charges

If you rarely use cheques, relying on digital banking helps reduce these costs.

d) NEFT / RTGS / IMPS Charges

📌 Tip:
Using net banking or UPI is almost always cheaper than branch transactions.

e) Overdraft Charges

Overdraft facilities are mostly linked to current accounts or special savings accounts.

• Interest charged daily on the overdrawn amount

• Typical rate: 10–15% per annum

Mini Case Study:
Rohit, a small business owner, overdrew ₹50,000 from his current account.
Daily interest cost: ~₹60
Monthly cost: ~₹1,800

Maintaining a small buffer balance could have avoided this expense.

f) SMS & Email Alert Charges

• SMS alerts may be free up to a limit

• Additional SMS alerts may cost ₹1–₹2 each

• Email alerts are usually free

Switching to app notifications can reduce these small but recurring charges.

g) Other Miscellaneous Charges

These may include:

• Stop payment requests

• Returned or bounced cheques

• Demand drafts

• Foreign currency transactions

• Duplicate account statements

Individually small—but collectively expensive if ignored.

2. Zero Balance Accounts: A Simple Way to Reduce Charges

Zero balance accounts are ideal for:

• Students

• Beginners

• Low-income earners

Key Benefits

• No minimum balance penalty

• Lower maintenance costs

• Fewer cheque-related fees

Examples:

• SBI Basic Savings Account

• ICICI Zero Balance Savings Account

👉 Related reading: Best Zero Balance Account Features in India

3. How Banks Decide Charges

Bank charges depend on several factors:

• Account type (Savings, Current, Premium, NRI)

• Transaction volume

• Mode of transaction (branch vs digital)

• Optional services (overdrafts, cheque books)

📌 Important Insight:
Digital banking (UPI, net banking, mobile apps) is consistently cheaper than branch-based banking.

4. How to Avoid or Reduce Bank Charges (Practical Tips)

1. Maintain the required minimum balance

2. Use your bank’s own ATM whenever possible

3. Opt for a zero-balance account if eligible

4. Prefer digital transactions over branch visits

5. Limit cheque usage and avoid cheque bounce

6. Check if you qualify for fee waivers (salary accounts, senior citizens, government schemes)

Mini Case Study:
Priya uses a zero-balance account and relies on net banking and UPI.
By avoiding physical cheques and excess ATM withdrawals, she saves nearly ₹2,000 per year in bank charges.

5. Bank Charges Summary Table (Quick Reference)