Bank charges are a normal part of banking systems in Nigeria. These charges can be described as part of the cost of running and maintenance for the services provided by the bank. This article will discuss the types of bank charges in Nigeria and their uses. When you visit any financial institution in Nigeria, you will be required to pay for one product or service provided by the bank. In Nigeria, bank charges are seen as a normal part of the banking system.
There are also other types of fees that banks charge which are not related to the bank’s core business activities. Such fees include error correction and warranty fees. We will briefly discuss the most common and popular types of bank charges in Nigeria here.
What Are Bank Charges?
Bank charges refer to all charges that a bank deducts from its customer’s account for services they provide. Bank charges are charged by all banks in Nigeria. For example, banks charge for performing transfers, issuing credit cards, running an account for account holders, exchanging currency, assessing loans etc. Banks may also charge for a proven cost incurred on third parties while providing the services requested by a customer.
What Is Bank Fee?
Bank fees can be described as those charges imposed by banks and other financial institutions on their personal and business customers for setting up their accounts, maintenance of their accounts and other minor transactional services they might provide. It may be a one-off charge or an ongoing charge. Examples of bank fees are ATM withdrawal fees, maintenance charges, late payment charges, transfer fees, cash deposit charges, bill payments etc Visit here for more on bank fees and bank charges. Bank fees are not regulated, they can be fixed by banks as they see fit.
Reasons Why Customers Should Pay Bank Charges
People always ask this question: why should bank customers pay bank charges? Customers should pay bank charges because they use bank services. The bank provides services like educating a customer on the type of account they should open that will best suit their needs of the customer. They can help to ensure that all transactions carried out by such customers are conducted smoothly and efficiently.
Also, banks charge their customers for running costs associated with running their business( e.g payment of salary). You will be charged if you want to have access to some financial services like managing funds and investing in securities or other assets like stocks and bonds.
Types Of Bank Charges In Nigeria
The following are the different types of bank charges in Nigeria.
Account Maintenance Charge
This is among the types of bank charges in Nigeria to customers that maintain accounts with the banks. Account maintenance fees can be charged on a monthly, quarterly or annual basis depending on the type of account the customer opened with the bank. Some banks can even charge their customers for having multiple bank accounts in different banks at the same time.
All credit or debit accounts in Naira currency linked to savings accounts attract a maximum of fifty (#50) naira charges as quarterly maintenance fees. Other credit and debit cards in foreign currency attract between $10 to $20. You must find out the banks that charge lower and operate your current account with them.
Account Closing Charge
These are fees the bank charge on their customers when they want to close their bank accounts. This is one of the several types of bank charges in Nigeria to take care of the cost of closing your current or existing account with the bank. It is not charged to all bank customers. The main purpose why the banks charge this fee is to discourage people from closing their accounts anyhow.
Account Opening Charge
This is a fee charged to bank customers for opening an account with the bank. This fee is charged at the point of opening the account. If you have a good client-customer relationship with your bank, or you have been a long-time customer with the bank, they can waive the account opening charges for you.
Account Dormancy Charge
This is the type of account fee charged to bank account holders who have not used their account with the bank for some time. Not using an account with the bank might be either because the customer doesn’t like the services of the bank any more or they need some time away before coming back to the bank to use their account. This is one of the legal fees charged by the law (the Banking Act) and the amount to pay is not certain.
Automated Teller Machine (ATM) Card Annual/Re-issuance Charge
For any bank to issue ATM cards to their customers, they are a charge that is always attached to it. ATM card charge can be between #500 and #1,000 and it is always deducted directly from the account. Account holders can use their ATM cards whether Master or Verve cards to withdraw cash from any other branch or bank that accepts such cards.
ATM Withdrawal Charge
This is one of the types of bank charges in Nigeria charged on account owners for using their ATM to withdraw money from any ATM. Withdrawals from other banks’ ATMs attract
a charge of between #65 to #35 after the third withdrawal in the same month. These charges are not always known to people until they make withdrawals from other machines.
Cheque Book Request Charge (Non-Customers)
This type of fee is charged to non-customers of the bank who wants a chequebook from their bank. Currently, a leaflet of counter cheques costs #200 so a booklet of cheques that contains fifty leaflets (50) will cost a total of ten thousand (#10,000).
Cheque Book Issuance/Re-issuance Charge (Customers)
This is the type of fee paid when the bank issues a new chequebook to their customers on request. The fee is charged per leaflet and the cost s #200 per leaflet.
Point Of Sales (POS) Merchant Services Charge
These are the fees that bank customers pay to their banks for using the POS terminals to make withdrawals. It is the merchants that are to pay such fees but they pass it on to their customers as part of their charges. The more the amount you withdraw from POS operators, the more charges you will pay.
Electronic Transfer Charge
This is one of the types of bank charges in Nigeria paid by account holders for transferring money from one bank account to another through the internet. The fee is not specific, it may vary from one bank to the other, depending on the amount you transfer and the bank that is receiving it. The charges have been reviewed and any transfer below five thousand (#5,000) naira will cost ten (#10) naira, then any transfer from #5,000 and above will cost #26 furthermore, any transfer above #50,000 will cost #50 as charges.
Because there are many types of banks in existence in Nigeria, the banks also have different fees they charge for the numerous banking services they provide. Some of these charges are different from what is obtainable in other countries.
Because the charges are different from what other countries charge, it is always difficult for foreign customers that want to do transfers abroad or use other financial services like foreign exchange trading or investment in Nigeria to do so. Because they don’t know the type of charges they will be exposed to by banks in Nigeria. Citizens and foreigners should find out and know the types of bank charges in Nigeria.