This is how banks fleece you

No free lunches. Your bank might be offering you more services than ever, but someone has to be paying for them. And more likely than not, it is you. So, feel free to ask. Also, read forms you sign. Till 1999, the Indian Banks' Association used to fix charges. But since banks were freed to have their own charges, numerous charges have crept in. It is pretty difficult and, often, unnecessary to track them all. In most bank branches, charges for regular services are displayed fairly conspicuously. What is not as much in public display are the penalties, such as those levied for not maintaining the minimum balance and quarterly average balance and overdrawing from the savings account. According to a BBC report published in December 2006, that year, the top six high street banks in the UK earned an estimated pound 4.5 billion (approx Rs 36,000 crore) only from penalty charges incurred for unauthorised overdrafts, bounced cheques and clearing direct debits when there are insufficient funds in the account. While no such figure is available for Indian commercial banks, industry sources estimate that it could be around Rs 3,000 per annum for an account in a private sector bank. (See: Biting charges). For the banks, it is like hitting the jackpot. Things to do * Close accounts you don't use. If you open one as a requirement for term deposits, go for a no-frill account. But even one of these, if it lets you have a zero balance, may charge you for frequent cash withdrawals. The cheque facility is also free only up to a number of cheques. * Check every service you are using and ask the bank whether they are costing you anything. * Overall, use ATMs, Internet banking and phone banking. Most of it is free and can save charges for services such as 'stop payment' of a cheque, or transferring money from one bank to another when the amount is above Rs 100,000. * Maintain quarterly average balance at all times. Keep track of automatic payouts and post-dated cheques. Else it could cost you up to Rs 750 in a private bank. Also, a bounced cheque can lead to criminal prosecution under law. * Also keep track of all your consolidate student loan schemes, refinancing,debt consolidation,equity home loan schemes.