Know Everything About Effective Utilisation of your ATM card

Debit Cards give us the flexibility of not carrying too much cash wherever we go. But where transactions involve the usage of cash, we tend to use our Debit Cards quite often to withdraw cash. This is because the ATM machines may be conveniently located around us. Many of us truly depend on ATMs to withdraw money whenever needed even to meet day-to-day expenses.

Also, it’s often noted that we tend to withdraw smaller amounts of cash as drawing a larger amount may lure us in to spending more. This tendency can result in multiple usage of ATMs-either from our home-bank or non-home banks. However, with the latest RBI guideline on the usage of ATMs, much will change in the manner in which we approach ATM banking in our daily lives. There will be an upper cap in the number of free transactions in a non-home bank ATM. Three transactions would qualify to be free for customers of six major metros viz. Delhi, Mumbai, Chennai, Bangalore, Kolkata and Hyderabad. However, there is an allowance of up to two more transactions in a non-home bank ATM if they were to make the transaction in a non-metro city in India. Beyond the prescribed limit, a customer may be required to pay up to Rs. 20 per transaction to the home-bank for ATM transactions conducted at non-home bank ATMs in any of these metro cities.  If you belong to a non-metro city, then you will continue to enjoy the privilege of 5 free transactions at any non-home bank ATMs.

Status: Past and Current

Before August 2014:

5 free transactions in a non-home bank ATM

RBI circular in August 2014:

Only 3 free transactions in a non-home bank ATM for customers of metro cities.

This was inclusive of both financial and non-financial transactions done at ATMs in the six metro cities.

Current Status:

For residents of metro cities, 3 free transactions in non-home bank ATMs and additional 2 transactions only if done in non-metro cities

For non-metro residents, continue to enjoy the 5 free transactions at non-home bank ATMs

Top 4 Ways to Effectively Use Your ATM Card

• Plan your monthly finances better: If you are aware of the range of fixed expenses per month, then avail of ATM services You must plan your withdrawals in such a manner that your needs are met within the prescribed withdrawal limits.

• Use your home bank’s ATM network: Make a note of your own bank’s ATMs near your residence, work place or any other area you visit often. Make your withdrawals from your home bank’s ATM network and you will not have to worry about paying any extra charges. In addition, certain mobile banking apps provide with the bonus feature of geo locating the closest home-bank ATM vestibule in your vicinity.

• Swipe instead of withdrawing: Swipe your Debit Card whenever possible instead of making purchases by cash.

• Start maintaining a separate fund at home: You may want to keep an emergency fund at your residence in order to meet unforeseen expenses. The fund need not contain a very large amount but ensure that it is sufficient enough to help you tide over an emergency. For example, if you need to order an expensive medicine to meet a medical emergency, your contingency fund could come in handy.

Regulations regarding usage of your ATM card may change frequently. But, with the above points in mind, you will be able to smartly use the ATM services offered by your bank.

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