What kind of bank charges do you get?

Posted by Felix Okoli on Tuesday August 27, 2013 at 8:3:45:

What kind of bank charges does your bank debit to your account?

Bank charges are debits that are charged to a customer's account by the bank as a way of paying the bank for the services rendered to that customer. It's even alarming that a lot of people who just opened a savings account and travelled abroad may come back 5 years later only to find out that the money in their account has already been depleted, all thanks to hidden or new bank charges recently introduced by these banks.

There are over 20 banks in Nigeria and each of them tend to have several charges that are normally debited to the account of their customers. Some of these charges are common while others are just specific to certain banks. It just seems that more Nigerian banks are getting desperate to make their business more profitable.

I recently checked my bank statement in one bank and this is for a savings account and noticed that my bank charges me for a lot of stuff, some of which I didn't know about.

Here is a list of some bank charges to my savings account:
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VALUE ADDED TAX (VAT)
This is mostly common to banks who charge customers for services rendered and t seems that they are collecting this tax on behalf of the government and it is normally based on a percentage of services they rendered to you. It is based on 5% of the cost of those services. In the case of my bank, I think it is around 5% of the account maintenance charge. It is a variable cost and depends on charges for services rendered to your account.

Account maintenance charges
This is a monthly fixed charge on a person's account just for having a bank account with the bank. I thought that banks were meant to beg you to keep money with them rather than charge you for doing so.
How to avoid this? Well, you can move your money to another bank of investing more money in the account and use the interest to offset the annual charge. Not all banks use this charge.

SMS Alert Charges
These are charges to your account as a result of sms notifications sent to you for transactions made to your account. You can avoid this charge by requesting rather for an email based notification at your bank. Nowadays, the CBN has made it compulsory for banks to send free email notifications to customers. The charge is a variable cost and depends on the number of transactions on your account at a rate which is fixed by the bank. My bank charges about N2 per sms alert and that means If I have subscribed to the service and get 100 alerts in a month, my account will be deducted by N200 in that month. It is however optional and you can stop sms alert and hence charges to your account for the service

FEE MNEMONIC
I'm not sure what these charges are for but one of my bank charges me N100 per month on a savings account while the other bank doesn't charge me at all. I think the best way to find out would be to ask your bank. You also have the option of moving your money to another bank that doesn't charge you much.

Personal opinion
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While I've noticed that some of these bank charges may be small and fixed per month, if you total them up for a year, it practically offsets the interest one can get from an ordinary savings account in Nigeria. Personally, I think if you are not happy with the numerous bank charges your bank gives to you, the best option is to move your funds elsewhere where you will be pampered. Not all banks have the same bank charges and some are totally free for a basic savings account.