Interchange fee is the fee that one bank pays to another when a customer uses an ATM that is not linked to his home bank.
ATM withdrawal fee: You will have to pay more fees for withdrawing money from ATM from May 1. The Reserve Bank of India (RBI) has approved a revision in the ATM interchange fee, which will now come into effect from May 1, 2025. This decision will affect both financial and non-financial transactions for bank customers. RBI has approved a Rs 2 increase in the fee for financial transactions, from Rs 17 to Rs 19. Other non-financial transactions such as balance inquiries will also increase by Rs 1, making it Rs 7 instead of 6.
5 times free withdrawal allowed
Customers are allowed a limited number of free transactions every month at ATMs of different banks. In metro areas, customers are given 5 transactions while in non-metro areas this facility is available 3 times. If the number of free transactions is exceeded, the additional fee that customers have to pay may be increased due to the already high interchange fee.
What is an interchange fee?
The interchange fee is the fee that one bank pays to another bank when a customer uses an ATM not linked to their home bank. It includes costs associated with the bank holding the ATM to service a specific cardholder for different banks. These ATM fee changes were last updated in June 2021.
Avoid paying higher charges this way
- Transact from your bank’s ATMs to avail free transaction limits.
- Keep a track of your ATM withdrawals to stay within the free transaction limit.
- Use digital banking services and online payment methods to reduce reliance on cash withdrawals.
