Tuesday, March 12, 2013

Some banks don’t charge a fee for using other bank ATMs

If you use automated teller machines (ATMs) to withdraw cash, you must be aware that after five transactions at ATMs of other banks, sixth transaction onwards is chargeable. However, did you know that there are banks that don’t charge anything for any number of transactions even if you are not their customer?

Who’s not charging fees?
Some banks including Federal Bank Ltd, Yes Bank Ltd and Standard Chartered Bank don’t charge any fee for any number of transactions at other bank ATMs. So even after the fifth transaction at other ATMs, you will not be levied any charge. Federal Bank has been providing this facility to all its customers since October 2011. Yes Bank has been providing this facility to its customers since its inception in 2004. In case of Standard Chartered Bank, if you maintain an average quarterly balance of Rs.25,000 in your account, you will not be charged for any number of transactions at any other bank ATMs for certain account holders. For a certain account holders there is no such conditions and it is completely free.
The norm
According to the Reserve Bank of India, all debit cards issued by banks in India can be used at any bank ATM within India. Now if you are a savings bank account holder, then you can do five transactions free of cost at other bank ATMs in a month. This is inclusive of financial and non-financial transactions. From the sixth transaction onwards, you will be charged a transaction fee by your bank.
Charges: The charges levied sixth transaction onwards at other ATMs vary from bank to bank. For instance, if you are a State Bank of India (SBI) customer, SBI will charge Rs.17 for every financial transaction such as cash withdrawal and Rs.6 for every non-financial transaction such as balance inquiry or mini statement. If you are an ICICI Bank Ltd customer, the bank will charge you Rs.20 for financial transaction and Rs.8.50 for non-financial transaction from sixth transaction onwards at other bank ATMs. The variation is mainly because RBI has asked the banks to not charge more than Rs.20 for financial transactions at other bank ATMs but they are free to decide the fee, however, not more than Rs.20.
How it works
Every transaction that you do at other bank ATMs, the card issuing bank, that is, your bank, has to pay an interchange fee to the other bank. For instance, if you are a X bank customer and have been using your debit card at Y bank’s ATM, X bank has to pay approximately Rs.7-18 per transaction to Y bank as interchange fee. In the case of Yes Bank, Federal Bank and Standard Chartered Bank, this charge is not passed onto you and is absorbed by the banks.

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