Common Bank Charges in Nigeria in 2023 and How to Avoid Them

Commercial deposit banks charge on every service rendered, as it should be. However, over time, this has plagued the experiences of their customers as some charges are mostly hidden and largely unnecessary.

Nowadays, most customers are even in forced marriages with their banks because they cannot really do without the essential services the banking industry is about.

However, some of these charges can be minimized on your account or totally avoided. The banks won’t like this article but hey! Bank Naija is here for you.

Been asking yourself what can I do to avoid being charged fees on my account? This article will highlight most Nigerian deposit commercial banks’ common charges and also how to avoid them.

ALSO READ: Bookkeeping and Accounting Tips for Successful Management of Small Scale Enterprises

Statutory/Unavoidable charges

First things first.

We need to state that some charges are statutory i.e they are unavoidable, as they are CBN directives.

Stamp duty charge:

Stamp duty is a charge levied at 0.75% on the authorised share capital at incorporation of a company or on registration of new shares.

All deposit banks and financial institutions are required by CBN to charge stamp duties of NGN 50 on every eligible transaction above NGN 10,000.

SMS Alert charges:

SMS alerts/notifications are text messages sent automatically to the bank customer’s pre-registered phone line immediately s/he initiates a transaction (either credit or debit) on their bank account.

The CBN, in a publication, directed that all bank subscribers and customers MUST get SMS notifications on their phones.

However, one can still opt-out from receiving SMS alerts 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.

Avoidable charges

Here are few tips to note to avoid getting unnecessary charges on your bank account:

Using other Bank’s ATM (N35/transaction)

Using another bank’s ATM terminal (machine) attracts a fee of N35 naira per transaction nationwide. Sometimes this is deducted alongside the withdrawn amount, or separately after a third withdrawal on another bank’s machine within the same month.

While this charge, though has been with us for a long time – is ridiculous, you can actually use your own bank’s ATM as many times as you wish free of charge. Hence to avoid this charge, just use your own bank’s ATM.

Account Maintenance Fee/COT (N1/Mille)

Commission on Transactions (COT), now Account Maintenance Fee (AMF), is usually taken on current and corporate accounts. The AMF is charged at N1/Mille, i.e One Naira is deducted from your account per one thousand naira withdrawal. 

That seems little right? Well, the charge for N1,000 is N1 and N1,000 for N1m. If your account is a high debit turnover account, this charge will become very frequent on your current of corporate account. It is taken monthly.

Now, here’s how to reduce your expense on this fee:

1. Depending on the volume of inflows a customer gets on their account, the customer can negotiate this fee with the bank. For example, you can write the bank to reduce it to N0.5 or N0.25.
2. However, the best way to avoid this is to ask for a ‘non-AMF/COT’ bearing account at inception. If you already use an AMF/COT bearing account, ask for a sub-account that does not bear AMF charges. Every Nigerian commercial deposit bank has this product but are always reluctant to let customers know, as they do not want to lose that Account Maintenance Fee income.

ATM Card Maintenance Charges (N52.50 monthly)

Debit/credit card maintenance charges is a quarterly charge the bank takes on new and existing debit and credit cards.

To minimize this, instruct the bank to unmap all lost/expired cards from your account. This is because many banks still take this charge on expired/lost cards, unknowing to the customer.

Also, try to make sure that you have just one carded account across all the banks you use.

A lasting solution to this charge is: Don’t take a card. This can only work if, of course, you have absolutely no need for it.

SMS Alerts (N4/SMS)

SMS alerts are notifications of transactions done in your current/corporate account. A text notifying you is sent to your registered phone line after every activity on your account. 

At least N4 is charged per notification, even if the bank wishes you a happy birthday. Many don’t know that email versions of these same alerts are ABSOLUTELY FREE.

As customers, we can instruct the bank to disable the SMS alert (via the indemnity explained earlier) and enable the email alerts only. Free of charge.

In-branch Statement Printing (N21.50/page)

Statements printed in the branch attracts fees, as the bank’s officials expend their time, paper, printer, etc to deliver this service. Therefore, they consider this to be an actual service being offered to you. 

You can save the statements charge for statements printing by doing it on your online banking app. Most banks have this feature right on their Mobile/Online banking apps. Some of them e.g UBA avail a PDF copy of the bank statement for free, others charge a minimal fee.

Betterstill, if you are checking for a transaction, you can go to ‘transactions done’ and scroll away to the time and date of the exact transaction. All bank apps have this feature.

Cash Withdrawals/Deposits

According to the CBN Cash Lite Policy implemented on 31st March 2020, withdrawal of large amounts of cash attracts a heavy fee to the customer. 

The Apex bank expects all bank customers to utilize their bank’s digital products, rather than use cash. The apex bank has made it clear that it does not want ‘cash-littering’ in the economy. The withdrawal/lodgments thresholds are:

• Corporate: N3,000,000
• Individual: N500,000

This means if you do a cash transactions above those thresholds, you will get a penal charge/fee.

To avoid this charge in any way, please avoid huge cash and use your online banking app.

Inter-Bank Transfers

As recently directed by CBN, all interbank transfers should carry a fee, depending on the volume of the amount being transferred.

0 – 5,000	N10
5,001 – 50,000	N25
50,001 – Infinity	N50
Intra-bank transfers	Free

Transferring funds within your bank is actually free of charge irrespective of the amount involved. Always ask your beneficiary if they have an account in your own bank before initiating.

Bills payments/Wallet top-ups/Funding your betting account

You would have discovered that whenever you are trying to pay your light or water bill from your bank app, an extra charge usually accompany the main payment. Also if you are trying to top-up your Bet9ja/AccessBet/others’ wallets, you may get an extra N100 charge from your bank.

You need to start taking advantage of the new fintech innovations and platforms – they are more generous with charges, most of them charge little or nothing. Here’s what you need to do:

1. Open an account/wallet with any of the new fintechs e.d OPay, PalmPay, ALAT, Kuda Bank, and so on
2. Do a one-off transfer from your bank to the Fintech company’s wallet
3. Pay your bills and top-ups from there.