Nigeria’s Bank Charges and How to Avoid Them
- on Jun 04, 2023
Frankly speaking, many bank customers in Nigeria are tired of unnecessary charges from their bank account. Meanwhile, people open a bank account to keep and save their earnings and not to spend it on bank charges that’s not adding values.
These are the major reasons why I compiled this article. You’ll learn how to avoid unnecessary bank charges in Nigeria. Although, some charges are reasonable and they’re part of commercial banks procedure proved by Central Bank of Nigeria (CBN).
Hence, many Nigerians prefer to use Fintech apps for their transfers and payments. Online banking services like Kudabank, OPay and PALMPAY begins to see surge in growth because people are forced to use them due to higher bank charges imposed by their traditional banks.
Furthermore, people use online banking platforms to avoid unnecessary bank charges. Meanwhile, some bank charges can be absolutely avoided or minimized on your account.
Bank Charges in Nigeria
Normally, commercial financial institutions in Nigeria deducts bank charges on every services rendered to customers, as it’s instructed by the regulator, CBN. Meanwhile, this has plagued the experiences of bank users as some charges are mostly hidden and largely unnecessary.
But due to some essential bank services customers can do without, they’re forced to stick to their bank charges. However, some of these charges can be minimized or avoided on your bank account. But before we dive into that, let’s look at statutory and avoidable bank charges.
Statutory/ Unavoidable Bank Charges
The statutory bank charges are fees stated as unavoidable charges imposed by the Central Bank of Nigeria (CBN). These charges are stamp duty and SMS alert charges.
Statutory charges are CBN directives. That is, bank users cannot do without being charged for these fees.
The N50 stamp duty charges are deducted everytime you receive N10,000 and above in your bank account. While the SMS Alert Charges are usually accumulated, calculated and debited at the end of the month.
Avoidable Bank Charges
Avoidable bank charges includes account maintance fees, ATM card maintance fees, ATM withdrawal fees, bill payment fees, inter-bank transfer and more. These bank charges are charges imposed by commercial banks. It can be classified as their own way of generating revenue for service maintanance and expansion.
Avoidable charges are Bank fees you can try to eliminate, eradicate or avoid completely. Unlike statutory fees, avoidable charges are unnecessary and not CBN’s directives.
List of Bank Charges in Nigeria
Here is the list of bank charges in Nigeria; we’ve listed both statutory/unavoidable and avoidable bank charges.
Stamp Duty Charges
Stamp duty charges are fees levied at 0.75% on the authorised new deposit in a bank. All commercial banks, online banks and other financial institutions are required by CBN to charge stamp duties of NGN 50 on every eligible transaction above NGN 10,000.
Stamp duty charge is an obligation imposed by CBN, all deposit banks must follow. So, this charges cannot be avoided or minimized or ignored.
SMS Alert Charges
SMS alert charges are fees deducted whenever a credit or debit notifications about your bank account are sent to your pre-registration phone number as SMS messages. CBN, in a press released, instructed all ban users must get SMS notifications on their phone to monitor their bank account activities.
Furthermore, N4 is charged per notification. In-fact, if your bank sent you birthday wishes, N4 will be charged at the end of the month. All SMS sent to your phone number will be calculated and debited from your account balance at the end of the month.
However, many bank customers don’t know that email version of receiving alerts and notifications is absolutely free. You can link your email address to your bank account to get credit and debit alert notifications for free. If you don’t know how to link email to your bank account, check the related article list to find your bank’s tutorial of linking email address.
How to Link Email Address to Bank Account :
If you bank is not listed, please use the comment box to inform us and we’ll reply you as soon as possible with instructions and steps to take to attach your email address to your bank account.
More-so, do note that you can opt-out from getting SMS alerts and notifications by filling an indemnity form at their bank. The indemnity form is to protect the bank from any loss arising from the customer’s non-receipt of SMS alerts. For example, if someone takes advantage of your not receiving alerts to defraud you.
Inter-bank Transfer Charges
Usually, sending funds within your bank is absolutely free. but if you’re transfer funds to another bank, you’ll charges according to amount as listed below.
- Banks charge N10 for amount range from N0 to N5000
- Amount range from N5001 to N50,000, banks will charge N25
- Furthermore, N50 will be charged for N50,001 and above
These obligations are directed by Central Bank of Nigeria (CBN) that all interbank transfers should carry a fee, depending on the volume of the amount being transferred.
Account Maintenance Fees
Previously known as Commission on Transactions (COT), it’s a fee that’s charged on bank account at N1/Millie. For example, N1 will be deducted from your bank account per N1000 withdrawal. Although, the Account Maintenance Fee (AMF) might seems little.
But let’s look at it from another view. You’ll be charged N1000 per N1 Million withdrawal. If your account is a highly debited turnover account, this charge will become very frequent on your bank account, and it’s taken monthly – which may become huge at the end of the month.
ATM Withdrawal Fees
You’ll be charged N35 per withdrawal whenever you use another bank’s ATM terminal. This charges are sometimes deducted alongside with the amount withdrawn or separately at the end of the month. However, using your bank’s ATM terminal for withdrawal is absolutely free.
Account Balance Enquiry Charges
It’s kind of weird when I discovered that my bank charges N10 for checking my account balance via USSD code. Yes, this is true. Your bank will deduct N10 fees from your account balance whenever you enquires your balance via USSD. More so, do note that your enquiries will be declined if you’re running on low balance.
In this situation, it’s advisable to use your bank mobile app to check your account balance because it enquires no fees and it’s absolutely free of charge.
ATM Card Maintenance Fees
For new and existing credit/debit ATM cards maintenance, it usually incur for N52.50 charges per month. To reduce the cost of ATM cards maintenance, instruct your bank to unmapped all lost/expired cards. you can also try to use all ATM card for your account.
Expert tips: do note that you can link one debit card to more than two account in the same bank.
Bill Payment Fees
Bills payments/Wallet top-ups/Funding your betting account usually incur for N100 charges from your bank. However, to stop this unnecessary bank charges, start taking advantage of the Fintech platforms and Neobanks like Kuda, OPay and Palmpay, they are more generous with charges, most of them charge little or nothing.
Cash Withdrawal and Deposit Charges
On March 31st of 2020, the Central Bank of Nigeria (CBN) imposed Cash Lite Policy on withdrawal of large amounts of cash. The Apex bank instructed all bank customers to utilize their bank’s digital products, rather than using cash always.
CBN has made it clear that it does not want ‘cash-littering’ in the economy. The withdrawal/lodgments thresholds are:
- Current/Corperate Account: N3,000,000
- Individual/Personal Account: N500,000
Furthermore, do note that if you do carryout cash withdrawal of those amount and above will incurs for penal Charges and Fees.
How to Avoid Bank Charges in Nigeria
Many common bank charges are unnecessary as previously explained. Meanwhile, it’s possible to avoid some of them and go for better and free-of-charge options. Therefore, here is how to avoid some bank charges in Nigeria:
- Avoid using other bank’s ATM terminal as it incur for charges and fees at the end of the month.
- Maintain using of one credit/debit card per one account and instruct your bank to unmapped all lost/misplaced/stolen/expired debit cards.
- Implement using of bank mobile app to carryout transaction such as checking of account balance that incurs for N10 charges when carryout via USSD, and sending of large amount of money that may incur penal charges and fees if you withdraw from over-the-counter.
- Fill an indemnity form to remove SMS alerts and notifications from your bank account and replace it with Email alert & notification which is absolutely free of charge.
- Make use of mobile money service provides such as OPay and Palmpay to carryout transactions related to bill payments to avoid N100 fee that commercial banks charge.
FAQS: Bank Charges in Nigeria
How Can I Avoid Bank Charges in Nigeria?
To avoid bank charges, you’ll need to minimize some bank services that incurs for charges and fees. However, do note that some charges and fees like stamp duty and SMS alert are unavoidable.
Which Bank has the Highest Charges in Nigeria?
Here are the list of Banks in Nigeria with Highest Charges and Fess:
Which Bank has the Lowest Charges in Nigeria?
Here are the list of Nigeria banks with lowest charges and fees:
- United Bank for Africa (UBA)
- First Bank of Nigeria (FBN)
- Guarantee Trust Bank (GTB)
- Unity Bank
- Polaris bank
Conclusion: List of Bank Charges in Nigeria
As you can see that without exception, all commercial banks in Nigeria usually incurs unnecessary charges and fees from their customers. Apart from stamp duty fees and SMS alerts fees made statutory by CBN, you can try to avoid all other bank charges and fees.
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