We use many financial products in our daily life. Right from a basic bank account to investing in shares, these helps in meeting our financial objectives. But for utilizing any financial product there are always certain conditions attached. If you fail to meet these conditions you have to pay a penalty or in simpler words charges. Even for utilizing a financial product you have to pay a fee sometime.
In general the fee you pay on these products may not make large impact on your finances. But many a time negligence on these smaller fees can leads to development of a wrong behavior with respect to our finances. We end up paying these fees on a regular basis without worrying too much about the impact.
Here are few of the financial fees which we should mind paying and how we can avoid them :
1. Bank accounts maintenance
Having a bank account is necessary to do any financial transaction. But to maintain them you need to maintain an average minimum quarterly or minimum monthly balance. If you fail to do so banks levy penalties which starts at Rs 150. If you are paying this charge then it may prove that you do not need this account. Many a times this situation arises when there are switches in job. You open new bank account with every job and leave your previous account unutilized. If job switches are many you may end up opening number of bank accounts. Since banks converts salary accounts into a savings accounts once you leave the organization, the penalty is imposed if minimum balance requirement is not met. To close such accounts later you end up paying all such charges. In an ideal situation you should not have more than two accounts for your banking transactions. Why pay the charges then? The moment you realize you cannot maintain the minimum requirement you should do a check as you may not need it. Close the account if it is so.
2. ATM withdrawal charges
You can transact with your bank ATM number of times. But you can use other bank ATMs free of cost for 5 transactions in a months. Above this you are levied per transaction charge of Rs 15-25 from respective banks. If you are making non-bank ATM transaction higher than stipulated free then charges may be small but not negligible. For a particular month it may happen due to any other reason but if such situation repeats on a regular basis then you need to keep a check on your requirement and then utilize your ATM card accordingly.
3. Credit card fees
Most of us own a credit card and most of us have them many. Right from purchasing a bus ticket to household items, credit cards is almost used everywhere. But owning a credit cards means paying an annual fees to the bank. While they may offer you free stuff, annual charge is something which you cannot avoid. Even if it is waived it is generally for 1-2 year and then you pay. If you hold many of these, you may pay a good amount as annual charge on your credit cards. Unfortunately, you will not utilize all of them and you end up paying unnecessary cost as annual fees. Avoid paying these fees and keep only limited credit cards. But yes, do remember the rules.
4. Demat account maintenance
This happens to many of us. Banks today offer a three in one account savings-demat-trading. When we switch jobs we change our banks. During this process we also open multiple demat accounts some of which we never use. Sometimes we get attracted to offers by new companies. All this leads to paying those unnecessary charges for annual maintenance of multiple demat accounts. Even if we would like to close all accounts to consolidate our finances we end up paying most of these charges. To avoid this avoid opening multiple account. Avoid getting lured to offers you get on your salary account or elsewhere and open a demat or trading account only if you are sure you need it.
5. Mobile roaming charges
Mobile is your life today. It has become necessity to stay connected personally and professionally. But rarely we go through our bills to check if we are using it efficiently. Take the case of roaming. We all have incoming free now but we still pay for making calls. If you do a lot of travel then these roaming call charges can be quite heavy in your bills.You can reduce these by avoiding unwanted use while you are on roaming. You can cut down use of mobile internet if you do not need it or avoid making too many calls while in roaming. A simple strategies like these pay off in reducing your mobile bills.
6. Extended warranties on products
Most products come with choices of taking an extended warranty. Be it mobile or your car. But many a times extended warranties are included in the product or it may not be that useful if it cannot cover measure cost of your item. Then you end up paying this additional cost for no use. When you purchase any product check if there is any extended warranty included. Even if you are buying it on your mobile see it does not duplicate the warranty that comes along with the product.
There can be many other fees which you may be paying elsewhere. You add up all these and it can make a significant impact in your budget. A wiser approach is to review your finances periodically and reduce all such costs.
Have you ever analysed such smaller costs? Do you take corrective measures if you find you are paying any cost which is unnecessary?
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