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Your savings account is a type of account that allows you to deposit and withdraw money at your convenience. It serves as an investment instrument that enables you to take your first step toward corpus creation. However, banks must set cash withdrawal limits to ensure they can meet the cash flow needs of all their customers. The bank sets these limits in consultation with the Reserve Bank of India. This article explains the standard cash withdrawal limits from banks.
Cash Withdrawal Limit is placed on various withdrawal provisions. The limit also differs from branch to branch.
Bank customers residing in metro cities typically have higher expenses. As such, the RBI and banks offer higher cash withdrawal limits to these customers. In comparison, bank withdrawal limits for customers of the same bank with branches in Tier I, II, III cities, along with semi-rural and rural areas are lower.
Most banks in India have set a limit of INR 1 lakh on cash withdrawals from the bank per day by cheque. This limit typically applies to self-use or self-addressed cheques.
Banks also determine withdrawal limits based on the type of account you hold. Current account holders enjoy higher withdrawal limits than those prescribed for basic savings account holders. However, banks provide priority savings account holders with higher cash withdrawal limits.
Banks typically offer higher cash withdrawal limits when you withdraw money from your home branch. However, the withdrawal limits are usually lower if you opt for withdrawals from non-home branches.
In addition to the limits on cash withdrawals from the bank per day, you also need to comply with ATM cash withdrawal limits. Your daily cash withdrawal limit at ATMs depends on your account type; it is significantly higher for priority accounts but may be slightly lower for regular accounts.
According to an RBI mandate, you receive five free transactions per month at your own bank's ATMs and three free transactions at other banks' ATMs. If you exceed these limits, you will incur a fee. The RBI has reviewed the fee structure for exceeding cash transactions at ATMs, effective January 1, 2022.
If a family member or friend withdraws cash on your behalf, the limit will be lower. For example, the withdrawal limit for a self-cheque is INR 100,000. However, if the bearer of the cheque is your friend, the cash withdrawal limit would be INR 50,000.
You must comply with bank withdrawal limits based on your chosen method of withdrawal. Despite the cash withdrawal limits, it is apparent that you can access funds in your account in several ways that make banking convenient.
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*Disclaimer: This article is intended for informational purposes only. We recommend consulting your income tax advisor or chartered accountant for expert guidance.
