ATM Update – If you’re someone who often uses ATMs for withdrawing cash, there’s an important update you should be aware of. Starting May 1, banks across India are changing the rules for ATM withdrawals. The Reserve Bank of India along with several leading banks has approved an increase in the fees that are charged after you cross your monthly free limit.
These changes are meant to adjust for higher costs of maintaining ATM infrastructure and also to encourage people to shift towards digital payment methods. So if you’re still using cash regularly, your monthly expenses might go up unless you plan your ATM visits wisely.
So, What Exactly Is Changing?
From May 1 onward, banks will start charging more for each ATM transaction once you’ve crossed your set number of free withdrawals in a month. Till now, you were usually charged around twenty-one rupees per extra transaction. But now, that fee has been increased to twenty-three rupees in most banks.
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The number of free ATM withdrawals will mostly stay the same — five at your own bank’s ATM and three at other bank ATMs in metro cities. In smaller towns, some banks allow more free transactions.
Which Banks Are Following the New Rules?
Almost all major banks like SBI, HDFC, ICICI, Axis Bank, PNB, and Kotak Mahindra are part of this change. Whether you use your own bank’s ATM or a different one, the revised charges will kick in once your free limits are exhausted.
Premium accounts or salary accounts in some banks may offer a few extra free transactions, so if you have one of those, it’s a good idea to check the terms with your bank.
How Will This Affect You?
For people who don’t keep track of their ATM usage, these charges might start piling up. If you’re in a city and rely heavily on cash, there’s a good chance you’ll exceed your free limit pretty quickly. And with the higher fee per transaction, your monthly banking cost could go up by quite a bit.
Pensioners, daily wage earners, and people who still deal in cash often will feel this the most. On the other hand, those who use digital payments regularly may not see much of a difference.
What Can You Do to Save Money?
You don’t have to completely stop using ATMs, but a few smart choices can help you avoid paying these extra fees:
- Try to take out larger amounts in one go instead of multiple small transactions.
- Use your own bank’s ATM whenever possible — the free limit there is usually higher.
- Keep an eye on how many times you’ve already withdrawn cash this month. Most bank apps show this.
- Start using digital payment methods like UPI, net banking, or debit cards — they’re usually free and more convenient.
- If your current bank account offers very few benefits, you might want to explore premium or salary account options that include extra free withdrawals.
Why Are Banks Increasing These Fees?
Running an ATM network is not cheap. Banks have to spend on maintenance, software, electricity, cash loading, and security. In recent years, fraud detection and cybersecurity costs have gone up as well. Meanwhile, the number of people using ATMs has actually dropped because digital payments have taken over in a big way.
To make up for these rising costs and to reduce the burden on the ATM network, banks are now shifting some of that cost to frequent ATM users.
Digital Payments Are the Way Forward
It’s no secret that digital payments are on the rise. Whether it’s UPI apps like PhonePe and Google Pay or simple debit card swipes at shops, people are moving away from cash.
Most digital platforms are free to use and give instant results. You also get benefits like cashback, payment history, and easy access to customer support. With digital banking getting more secure and user-friendly, using cash less often is becoming the smarter choice.
Metro vs. Non-Metro Rules
Just so you know, ATM rules slightly differ in big cities and smaller towns. In metros, you get fewer free transactions at other bank ATMs — usually three. In non-metro areas, it can go up to five. This setup is based on usage patterns and ATM availability in these regions.
Withdrawing cash is going to cost a little more from May 1, so it’s the right time to be more aware of how you use ATMs. You don’t have to stop using them, but knowing your limits and planning ahead will help you avoid unnecessary charges.
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Start exploring digital options if you haven’t already, and take a closer look at your bank’s policies so you know where you stand. A little awareness can save you a good amount of money every month.