Starting May 1, 2025, withdrawing cash from ATMs will become more expensive.
The Reserve Bank of India (RBI) has decided to raise the ATM transaction fee for withdrawals beyond the free limit.
This means you’ll now have to pay extra fees to withdraw your own money, once you exceed the allowed number of free transactions.
What Are the New Charges?
Currently, if you exceed your free limit for ATM withdrawals, you pay a fee of Rs 21. However, from May 1, 2025, this charge will increase to Rs 23 per transaction.
So, every time you withdraw money beyond your free limit, you’ll be charged Rs 23.
Free Transaction Limit Remains the Same
The good news is that the number of free transactions per month remains unchanged. You can still make up to 5 withdrawals for free from your own bank’s ATMs.
Additionally, in metro cities, you’re allowed 3 free transactions at other banks’ ATMs, while in smaller cities, the limit is 5 free transactions at other banks’ ATMs.
Impact on Customers of Small Banks
Customers of smaller banks may face more difficulties, as these banks typically have fewer ATMs.
As a result, they might need to use ATMs of other banks more often, quickly exceeding their free transaction limit and incurring extra charges.
To avoid this, some may consider switching to larger banks with more ATMs.
Why Is the Fee Being Increased?
Banks and ATM operators have been facing rising operational costs for a while. In response to these concerns, the RBI has approved an increase in transaction fees.
What Should Customers Do?
If you rarely withdraw money from ATMs, this fee increase may not affect you much.
However, for those who withdraw cash frequently, it’s advised to use your own bank’s ATM to avoid extra charges.
Additionally, adopting digital payment methods like UPI and net banking could help minimize ATM withdrawals, saving you from unnecessary fees.
