How To Avoid Common Nigerian Bank Charges in 2022.
If you are looking for How To Avoid Common Nigerian Bank Charges then you are in the right place. Banking in Nigeria can be expensive, especially if you don't know how to avoid the various bank charges that are imposed on customers. If you're not careful, these charges can eat into your savings and leave you with very little to show for your hard-earned money.
Fortunately, there are some steps you can take to avoid these charges. In this article, we'll show you how to avoid some of the most common Nigerian bank charges. By following these tips, you can keep more of your money in your pocket and use it to achieve your financial goals.
The way some banks charges has upset the experiences of their customers over time, as some charges are mainly unnecessary and mostly hidden.
Most customers nowadays are even in forced union with their banks. The reason is that they cannot really do without the crucial services that the banking industry is.
However, some of these charges can be totally avoided or reduced on your account. Ask yourself what you can do to avoid being charged fees on your account.
This article will emphasize the most common charges in Nigerian deposit commercial banks and how to avoid them.
Take Note of this important information!
Some charges are inescapable i.e they are CBN orders or statutory as we may say. see those standard charges as directed by CBN below:
Stamp duty charge
A charge levied at 0.75% on the authorized share capital on the registration of new shares or at the incorporation of a company.
The Central Bank of Nigeria [CBN] allows all financial institutions or deposit banks to charge NGN 50 on stamp duties on every eligible transaction above NGN 10,000.
SMS Alert charges
SMS notifications/alerts are messages automatically sent to the bank pre-registered customer’s phone line instantly after he/she creates a transaction (either debit or credit) on their bank account.
In a publication, the CBN instructs that all bank customers and subscribers MUST receive SMS notifications on their phones.
Nevertheless, one can discontinue receiving SMS alerts by completing an indemnity form at their bank. The indemnity form is to safeguard any loss arising from a customer's non-receipt of SMS alerts with their bank. Someone, for example, might want to defraud you by taking advantage of your not receiving alerts.
How To Avoid Common Nigerian Bank Charges [Avoidable charges]:
If you’re reading this, it means you’ve been stung by a bank charge. You’re not alone; in Nigeria, banks like to impose all kinds of sneaky charges on their customers. If you are going to be operating a bank account for any length of time, it is important to understand what these charges are and how they work.
Unavoidable bank charges seem to be an unavoidable part of using your own bank account in Nigeria. The charges can vary depending on the type of account that you have with the bank and also on how much activity you have on your account.
Banks tend to use them as a source of income rather than just providing services with reasonable fees. As such, there are several ways to avoid unnecessary bank charges in Nigeria and become more discerning when opening up new accounts with different banks.
Here are some suggestions to note on How To Avoid Common Nigerian Bank Charges regarding your bank account:
Using Another Bank’s ATM
Most banks in Nigeria have a network of ATMs that their customers can use to withdraw cash. However, if you try to withdraw money from an ATM that's not part of your bank's network, you'll be charged a fee. In some cases, this fee can be as high as ₦35.
Using a different bank’s ATM terminal attracts a fee of ₦35 naira per transaction nationwide. Sometimes it is deducted together with the withdrawn amount, or not together, within the same month after the third withdrawal on another bank’s machine.
To avoid this charge, only withdraw money from ATMs that are part of your bank's network. You can usually find a list of these ATMs on your bank's website. If you're not sure which ATMs are part of your bank's network, you can always ask a customer service representative for help.
Although this charge has been with us for a long time – is ridiculous, so I will advise you to always use your own bank’s ATM actually as many times as you wish free of charge to avoid these charges.
Don’t Request For Statements Of Account:
It is compulsory for your statement of accounts to be sent to you monthly by your bank, free of charge. However, a fee of ₦20 per page is charged for any special request for statements of account. That too can add up depending on the number of pages.
Instead, you can always ask for your transaction history if you can access your account online, by defining a beginning and ending date, which is what the statement request you ask for would do for you. You can avoid the bank charges that come with special requests for statements by using the online access to go through your transaction history over a period of time.
COT/AMF (₦1/Mille):
Commission on Transactions (COT), being Account Maintenance Fee (AMF), is usually taken on current and corporate accounts. The AMF is charged at ₦1/Mille, i.e per one thousand naira withdrawal one Naira is deducted from your account.
That seems a little right. Well, ₦1 is the charge for ₦1,000 and ₦1,000 for ₦1m. If your account is a high debit turnover account, this charge will become very frequent on your current corporate account. It is taken every month.
Here’s how to reduce your cost on this fee:
- The customer can go into negotiating this fee with the bank depending on the volume of income the customer gets on their account. For example, if you want it to be decreased to ₦0.5 or ₦0.25, you can write to the bank for review.
- However, asking for a ‘non-AMF/COT’ bearing account at the start is the best way to avoid this. Request for a sub-account that does not bear/carry AMF charges if you are using an AMF/COT-bearing account. The bankers are always reluctant to make known to customers that every Nigerian commercial deposit bank has this product, as they do not want to forfeit that Account Maintenance Fee income.
ATM Card Maintenance Charges
The bank takes charges on new and existing credit/debit cards for card maintenance charges quarterly.
To minimize the charges, inform the bank to unmap the cards that have either been lost/expired from your account. The reason is that many banks may still take this charge on expired/lost cards, which the customers do not know about.
Also, try to ensure that across all the banks you use, you should have just one carded account.
A solution that lasts longer than this charge is for you not to take a card. This can only work if you are absolutely no need for it.
SMS Alerts
SMS alerts are transaction notifications done in your corporate/current account. After every activity done on your account, a notification text is sent to your registered phone line.
Even if the bank sent you a birthday wish, at least there is a charge per notification. Email versions of these same notifications are FREE which many don’t know.
As customers, we can instruct the bank to enable the email notification only to disable the SMS alert (via the indemnity explained earlier) free of charge.
In-branch Statement Printing
As the bank’s officials expends their printer, paper, time, etc to deliver this service, have in mind that the branch charge for printing this statement. Thus, they assume this to be a basic service being offered to you.
By doing your statement printing on your mobile banking app, you save the statement charge for statement printing. Most banks have this feature available on their Online/Mobile banking apps. Banks like UBA, and Stanbic IBTC avail the bank statement for free in PDF format, while others levy a minimal fee.
You can go to transactions are done and scroll away to the date and time the exact transaction was done, if you are reviewing a transaction. This feature is available in all banking apps.
Cash Deposits/Withdrawals
To withdraw a large amount of money from the bank attracts a heavy fee to the customers, according to the CBN Cash Lite Policy that was implemented on 31st March 2020.
Rather than use cash, Apex bank expects all bank customers to operate their bank’s digital products. The Apex bank has made it known to all the banks that in the economy, it does not want ‘cash-littering’. The lodgments/withdrawal thresholds are:
- Individual: ₦500,000
- Corporate: ₦3,000,000
This, therefore, means if your cash transaction is above those thresholds, you will get a penal charge/levy.
Inter-Bank Transfers
As directed by CBN just recently, all interbank transfers should carry a charge. You are either charged high or low depending on the volume of the amount being transferred.
| 0 – 5,000 | ₦10 |
| 5,001 – 50,000 | ₦25 |
| 50,001 – Infinity | ₦50 |
| Intra-bank transfers | Free |
You are not charged for transferring funds within your bank irrespective of the amount involved. Verify from your beneficiary if they have an account in your own bank before you do any transfer.
Wallet top-ups/Bills payments/Funding your betting account
An extra charge usually accompanies the main payment whenever you are trying to pay your water or light bill from your bank app. Also if you are trying to top up your AccessBet/Bet9ja/others’ wallets, you may get an extra charge of ₦100 from your bank.
You need to start taking advantage of the latest platforms and fintech innovations – they are more helpful with charges, and most of them charge nothing or little. See what you need to do:
- Open a wallet/account with any of the new fintech e.d Barter, PalmPay, ALAT, OPay, Kuda Bank, and so on
- From your bank, do a one-off transfer to the Fintech company’s wallet
- Pay your bills and top-ups from there.
Conclusion on How To Avoid Common Nigerian Bank Charges
In conclusion, there are several ways to avoid common Nigerian bank charges. First, be sure to keep track of your account balance and transactions. Second, avoid using ATMs outside of your bank's network. Finally, be aware of fees for services such as international transfers and overdrafts. By following these tips on How To Avoid Common Nigerian Bank Charges, you can save yourself a significant amount of money in bank fees.