Monthly Bank Charges Explained (What To Expect)
For many bank customers, the most confusing part of banking is not transfers or withdrawals, but the steady, often unexplained deductions that occur every month. These monthly bank charges can gradually erode account balances, leading to frustration and mistrust. Yet, most of these charges are not random. They are rooted in banking contracts, regulatory approvals, and the cost of maintaining accounts.
What Are Monthly Bank Charges
Monthly bank charges are periodic fees deducted by banks for maintaining and servicing an account, regardless of how frequently the customer uses it. Unlike transaction based charges (such as transfer or ATM fees), monthly charges apply simply because the account exists and remains active on the bank’s system.
They typically cover:
- Account administration
- Digital infrastructure maintenance
- Regulatory compliance
- Customer support and notifications
In essence, they represent the cost of keeping an account operational.
Why Banks Charge Monthly Fees
Banks are service institutions with continuous obligations, even when customers are inactive. Every account on a bank’s system requires:
- Secure data storage
- Cybersecurity monitoring
- Regulatory reporting to the Central Bank
- Anti-money laundering (AML) and Know-Your-Customer (KYC) compliance
- System upgrades and maintenance
These costs do not disappear when a customer stops transacting.monthly charges are how banks recover part of these ongoing operational expenses.
Common Types of Monthly Bank Charges
Understanding the nature of monthly deductions helps customers distinguish between legitimate fees and questionable charges.
Account Maintenance Fee
This is the most common monthly charge. It covers the general cost of managing the account, including record keeping and system access. In many jurisdictions, including Nigeria, the amount and structure must align with Central Bank approved guidelines.
SMS / Alert Charges
Banks charge for transaction notifications sent via SMS. These fees:
- Are often deducted monthly
- Apply even if the account is rarely used
- Can sometimes be deactivated at the customer’s request.
Hence, seemingly minor, SMS charges can accumulate significantly over time.
Card Maintenance or Card Service Fees
Debit cards linked to accounts may attract:
- Monthly service charges
- Annual or prorated maintenance fees
These charges may continue as long as the card remains active, even if it is rarely used.
Digital Banking or Platform Fees
Some banks apply small recurring charges for:
- Mobile banking access
- Internet banking services
- USSD banking platforms
These fees reflect the cost of maintaining secure digital channels.
Regulatory or Statutory Charges
Certain deductions are not bank-created but arise from statutory obligations, such as:
- Stamp duty (where applicable)
- Other government mandated levies
Banks merely act as collection agents for these charges.
Monthly Charges vs Transaction Charges
It is important to distinguish between the two:
- Monthly charges apply automatically, based on account existence.
- Transaction charges apply only when a customer performs an action (transfer, withdrawal, bill payment).
Customers often confuse the two, leading to the mistaken belief that inactivity should prevent all deductions. In reality, inactivity only limits transaction fees not maintenance costs.
What Happens to Monthly Charges on Dormant Accounts
A dormant account is inactive but not closed. Because it still exists on the bank’s records:
- Maintenance charges may continue
- SMS charges may still apply (unless disabled)
- Card fees may remain active
Charges usually stop only when the account is formally closed, not when it becomes dormant.
The Regulatory Framework Governing Monthly Charges
In Nigeria, monthly bank charges are regulated by:
- The Central Bank of Nigeria (CBN) through its Guide to Charges by Banks and Other Financial Institutions
- Consumer Protection Regulations
- The Federal Competition and Consumer Protection Act (FCCPA) 2018
Under these frameworks:
- Banks can only charge fees approved by the CBN
- Charges must be transparent and disclosed
- Excessive, hidden, or unapproved fees are unlawful
When Monthly Bank Charges Become Illegal
Monthly deductions cross into illegality when:
- They are not listed in CBN-approved charges
- They exceed approved limits
- Customers were not informed or did not consent
- Charges continue after an account has been formally closed
- Multiple fees are charged for the same service
Customers have the right to dispute such charges and seek redress.
How Customers Can Reduce or Avoid Monthly Charges
Customers can take proactive steps to manage deductions:
- Request a breakdown of monthly charges from the bank
- Deactivate SMS alerts if not needed
- Close unused or redundant accounts
- Opt for zero-maintenance or basic accounts where available
- Regularly review account statements
Awareness is often the strongest protection against unnecessary deductions.
Why Transparency Matters
Monthly charges are not inherently unfair. What creates frustration is poor communication. When banks fail to explain:
- What is being charged
- Why it is being charge
customers can opt out when Trust erodes. Transparent pricing builds confidence and reduces disputes
Conclusion
Monthly bank charges are a normal feature of modern banking, reflecting the cost of maintaining secure, regulated, and accessible financial services. While many of these charges are legitimate and approved by regulators, customers are entitled to clarity, fairness, and lawful application.
Understanding what to expect empowers customers to manage their accounts better, challenge improper deductions, and make informed decisions about where and how they bank. In the end, informed customers and transparent banks create a healthier financial system for everyone.
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