How To Save on Service Fees for Current Account?

Do you have a current account with any bank? If so, how much are you paying to the banks every year just to maintain this account?

I did a quick survey and noticed that it is quite common for banks to charge monthly fees and dictate minimum sum to maintain on these accounts.



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For example,

- UOB (i-Account) charges $2 flat per month. On top of that, it levies a $7.50 charge if your monthly average balance falls below S$3k, and charge $10 per cheque book (from the 3rd chequebook onwards).

- DBS (Current Account) charges S$7.50 per month if monthly average balance falls below S$3k.And $10 per chequebook (from the 2nd chequebook onwards)

- OCBC (Personal Current Account) charges you S$7.50 per month if monthly average balance falls below S$3k.

If you had accidentally issued out any cheque without ensuring sufficient funds in your account, bank also charges interests on the overdraft amount, and in some cases, service charge for incidental overdraft. There is also a returned cheque fee of about $40 for every bounced cheque, depending on which bank it is.

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Personally, I do have a checking account that I used pretty regularly, and I have never paid any fee for the account. I’ve always gotten FREE cheque-books and I’m not required to maintain $3k in minimum balance. No penalty for not doing that.

The trick is – I use an unsecured credit line account as my checking account.

In fact, when I first opened my unsecured credit lines with one of the local banks a few years back during a promotion drive, I was given S$30 credit for free.

The only criteria is that you have to earn at least S$20,000 per annum in order to qualify. And YOU MUST MAINTAIN CREDIT BALANCE IN THIS ACCOUNT ALL THE TIME. Never draw down on your overdraft. Otherwise, bank will charge you hefty interest for unsecured loans.

You’ll also have to note that most banks charges annual fee for unsecured credit lines (which can range from $50 to $200 per year). But so far, my experience has been one where banks are more than happy to waive off these annual fees upon customer’s request. (Anyway, if the bank is unwilling to waive, you should just close the account).

In my humble opinion, so long as you use this account prudently and sensibly, it is a good option to consider.