Current Account Charges Explained: What You Need To Know?

If you’re opening a current account for your business, it’s easy to get tripped up by a bunch of hidden fees. 

Banks love adding charges for all sorts of things, minimum balance penalties, fees for cash handling, charges if a cheque bounces, and even a cost just to close your account. 

Moreover, every bank has its own way of doing things, so it pays to know what you’re signing up for.

Thus, learning about these charges before you pick an account saves you from nasty surprises later. 

It lets you pick something that actually fits how your business runs, so you’re not constantly watching your money disappear to fees you didn’t expect.

Thus, the article seeks to inform you to avoid the hidden Current Account Charges. The clients of a bank benefit more when they learn more about all the avoidable mistakes. 

Common Current Account Charges

The banks generally impose Current Account Charges in various ways. This includes charges such as MAB, Cash Deposit, and Withdrawal Charges.

In addition, it includes transaction charges, cheque-related charges, and several Other Charges.

Here are the details about the major Current Account Charges that people often have to pay. 

1. Minimum Average Balance (Mab) Non-Maintenance Penalty

Let’s start with the big one. Almost every current account asks you to keep a certain average balance. 

Moreover, for basic or startup accounts, this might be zero, but for premium ones, banks sometimes ask for ₹10 lakh or more. 

If your balance dips below the mark, even for a month or a quarter, the bank slaps you with a penalty of ₹500 to ₹5,000, or more depending on the gap and the account type. 

Thus, businesses with fluctuating cash flows really need to pay attention here. This penalty can be a headache if you choose the wrong account for your needs.

2. Cash Deposit And Withdrawal Charges

Banks usually let you deposit a certain amount of cash for free every month. Basic accounts might give you a limit of ₹1 lakh or ₹2 lakh, while premium ones let you go as high as ₹10 lakh or more. 

Deposit more than that, and you’ll get charged, usually ₹1 to ₹3 for every extra ₹1,000 you put in. 

Withdrawals work the same way, especially if you’re taking out cash at a branch that isn’t your “home” branch. 

If your business handles a lot of cash, like retailers or wholesalers, pay extra attention to these limits, or you’ll end up bleeding money on fees.

3. Transaction Charges

Most online transactions, NEFT, RTGS, IMPS, and UPI, are free or come with a tiny charge. 

But some basic accounts limit the number of free digital transactions each month. Go over that, and you’ll start paying a per-transaction fee. 

If you’re still using the branch for things like demand drafts or pay orders, those have their own fees, usually anywhere from ₹25 to ₹100, depending on the type and amount.

4. Cheque-Related Charges

If you write a cheque and it bounces, maybe the funds weren’t there, or the signature was off- you’ll get charged. 

The fee can be anywhere from ₹100 to ₹750 each time. If someone else’s cheque to you bounces, you still pay a fee, though it’s usually less. 

Hence, Banks give you a set number of free cheque leaves every quarter (usually between 25 and 50), but if you need more, you pay per cheque, usually ₹2 to ₹5 each.

5. Other Charges To Watch Out For

Here are some other Current Account Charges that current account holders may have to pay.

• Account closure within 12 months: ₹500 to ₹1,000
• Duplicate statements: ₹100 to ₹300 each
• Stop payment instructions: ₹50 to ₹200 per cheque
• Business debit card annual fee: ₹200 to ₹500
• SMS alerts: ₹25 to ₹75 every quarter
• Balance certificate or audit confirmation: ₹200 to ₹500 each
• Signature verification: ₹50 to ₹150 per time

On their own, these might look small, but if you’re running a business with hundreds of transactions every month, the total can really add up over a year. 

Always ask your bank for its full schedule of charges before you even open the account.

What Are The Things That We Should Remember About Current Account Charges?

Every bank and every account variant stacks up charges differently. The big ones to watch are the minimum balance penalty, cash fees if you go over your free limit, and anything related to cheques. 

Before you sign up, take a minute to think about how your business actually works, and how much money will sit in the account.

Additionally, consider how often you’ll need to deposit cash and how many transactions you’ll make. Furthermore, compare those details with the fees for each account. 

Moreover, what looks like a great deal at first can turn into a money pit if you don’t match your business habits with the right account. 

It’s way easier to get it right the first time than to switch things up later.

Frequently Asked Questions (FAQs)

Here are the answers to some of the most commonly asked questions about Current Account Charges.