Enjoy no-frills savings a/c

Over the past couple of months, banks have rolled out no-frills accounts, which need either nil or low minimum balances.

The country's largest and state-run bank, State Bank of India (SBI), has introduced this facility "� no-frills accounts "� in Aurangabad, in which the bank made it possible to open accounts with 'zero' balance and deposit amounts as paltry as Rs 5.

With a view to lending a local flavour, State Bank plans to rope in services of non-governmental organisations, retired teachers, self-help groups and women as 'SBI Mitras' to assess the target clients in opening the bank accounts and offer support for banking transactions.

Apart from basic banking services, the bank plans to offer rural depositors even personal and consumer loan products as well as life and healthcare insurance products.

As far as private sector banking behemoth ICICI Bank is concerned, the minimum quarterly average balance would vary according to the provision of the chequebook facility.

That is the depositor would have to keep a balance of Rs 300 in case he does not use the chequebook facility, and Rs 500 if he does. In case a customer uses chequebook, he can request for additional chequebooks (with 25 leaves) at Rs 50 per chequebook.

The bank would charge a penalty of Rs 50 for non-maintenance of the quarterly average balance. Only if one pays an annual fee of Rs 99, one would be eligible for a debit card.

One can avail of internet and mobile banking services only if one makes an annual payment of Rs 100 for either of these services.

ICICI Bank offers its no-frills account holders only six transactions at branches and ATMs free of cost per month. For every additional transaction at the branch, you would be charged Rs 50, while at ATMS, it would cost you Rs 15 for every extra transaction.

Another major banking player in the private sector, HDFC Bank has introduced a no-frills facility with a minimum QAB of Rs 500. However, it offers the holder of such an account only one free transaction at the branch and ATM per month.

While for additional ATM cash deposits/withdrawals HDFC Bank would charge Rs 30 per transaction, for every additional branch transaction it would charge Rs 60.

However, the account holder does not have to shell out any additional fees for usage of internet and mobile banking services. Mid-sized private entity IndusInd Bank has launched basic banking accounts, which customers can start with Re 1 as the opening balance.

Under this account, the customers can avail of free internet registration and weekly direct withdrawal facility with an option of an ATM card.

Under the no-frills account put in place by state-owned Vijaya Bank, one can open the account with a minimum initial deposit of Rs 10 and can continue even with a zero balance. One can operate the account through withdrawal slips, and non-maintenance of the QAB will not invite any folio charges or penalty.

So, with the number of free transactions being limited, the account holder needs to prioritise his visits to the bank/ATMs and also try to possibly complete all necessary transactions in a single visit.

And as there are a very few free lunches available, it is prudent for one to check on the bank's websites prior to opening such accounts, to avoid paying for what one thought was free!