What do service charges refer to in banking?

Service charges in banking primarily refer to fees that are applied for account maintenance or specific transactions, and these vary depending on the type of account that a customer holds. Banks typically charge service fees to cover the costs associated with managing customer accounts and providing various financial services.

These charges may be associated with maintaining the account, such as monthly maintenance fees or fees for overdrafts, as well as fees for specific transactions like wire transfers, ATM usage outside the bank's network, or excessive withdrawals beyond what is permitted in a given period.

Understanding service charges is crucial for customers to manage their banking costs effectively, as these fees can impact the overall cost of maintaining an account. By being aware of the specific charges linked to their account type, customers can make informed decisions about their banking choices and financial management.