There are ways to save money on ATM cash withdrawals. Read on to find more.
When you withdraw cash from your Automated Teller Machine (ATM), you invariably end up paying a fee to your bank. Coupled with that, your ATM's operator may charge you an additional cost. However, there are ways to avoid paying your ATM fees, such as using your bank's ATM, finding a partner ATM, or using an account that refunds ATM fees.
The Reserve Bank of India (RBI) has laid down policies regarding transactions through ATMs. Under this policy, customers are allowed free withdrawals through ATMs up to a certain limit, beyond which they are liable to pay charges on their transactions via ATMs. Typically, banks offer a minimum of five free financial transactions every month to customers with savings bank accounts. In addition, there will be a limited number of free non-cash withdrawal transactions available.
According to the change in RBI regulations, customers are now entitled to three free ATM transactions each month instead of five. "Moreover, the rule applies to customers in Bengaluru, Mumbai, Chennai, Kolkata, Delhi, and Hyderabad. At any location, other than the six metro locations mentioned above, banks must offer their savings bank account holders a minimum of five free transactions (including financial and non-financial transactions) at other bank ATMs in a month," according to RBI site information.
It should be noted that transactions include financial and non-financial transactions at ATMs. The maximum fee charged is Rs 21 per transaction. While Citi Bank still offers unlimited free transactions, IDBI Bank offers free unlimited transactions at its ATMs and five free transactions at other ATMs. The ATM transaction fee comes with a GST of 18 per cent, applicable on all banking products and services from July 1, 2017.
Banks determine the service charges for cash withdrawal transactions using credit cards at ATMs and overseas ATM withdrawals.
Here are some you could save money on ATM withdrawal charges:
Try Using Your Bank's ATM: Your bank would allow you to use their ATM without extra charges. Hence it's more convenient and safe to use your bank's ATM.
In-Network ATMs: "You could check whether your bank has partnered with other banks or organizations to give you access to additional free ATMs. Your bank may also be a part of a larger ATM network and allow you to make free cash withdrawals at any of these machines," says AK Narayan, CEO of AK Narayan Associates, a financial planning firm.
Save Free Transactions For Withdrawals: Try to save your free transactions for withdrawals only. For the rest of your queries, like balance enquiry, mini statements, etc., you could use mobile banking.
Pay Your Bills Online: "Try to pay your bills online once in a while. Make your bill payments directly from your bank account," adds Narayan.
Swipe Your Cards: You could reduce the number of times you need to withdraw by simply swiping your cards instead of withdrawing money from the ATM. Some merchants now use card readers, which saves you from the hassle of finding an ATM and transaction charg