How Much Cash Can Be Withdrawn From Bank? | Freo

22-Jun-2024

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How Much Cash Can Be Withdrawn From Bank?

Your savings account is a fundamental financial tool that allows you to manage your money efficiently. It serves as a platform for both deposits and withdrawals, enabling you to build a financial cushion. However, banks institute cash withdrawal limits to regulate the outflow of cash and maintain financial stability. These limits are set under regulatory guidelines established by institutions such as the Reserve Bank of India (RBI). Understanding the withdrawal limits imposed by banks is essential for managing your finances effectively and avoiding unnecessary inconvenience. By familiarizing yourself with these limits and exploring alternative banking solutions, you can make informed decisions to meet your financial goals while adhering to regulatory requirements.

What are savings withdrawal limits?

Withdrawal limits dictate the maximum amount of cash that can be withdrawn from a bank account within a specified timeframe. These limits vary based on several factors, including the type of transaction and the account holder's banking preferences.

Cash Withdrawal Limit from Banks

Withdrawal limit on cheque transactions

When withdrawing cash via cheque, banks often impose limits to mitigate risks associated with fraudulent activities. These limits may vary depending on the account holder's relationship with the bank and their transaction history.
Cash withdrawal limits based on Location

Banks may impose different withdrawal limits based on the geographical location of the branch or ATM. Urban branches typically have higher withdrawal limits compared to rural ones, reflecting the variance in cash demand across regions.
Withdrawal limit on ATM transactions

ATM withdrawal limits are set to regulate cash dispensation and ensure the availability of funds for all customers. These limits may vary depending on the bank, account type, and the ATM's location.
Withdrawal limits based on account type

Different types of accounts, such as savings accounts, current accounts, and premium accounts, may have varying withdrawal limits. Premium accounts often offer higher withdrawal limits as part of their benefits package.
Withdrawal limits for third-party transactions

To prevent unauthorized access to funds, banks may impose restrictions on third-party cash withdrawals. These limits safeguard account holders against potential fraud or misuse of funds by unauthorized individuals.

Reasons for Withdrawal Limits

Compliance with regulations: Banks adhere to regulatory guidelines set forth by governing bodies like the RBI to maintain financial stability and protect customers' interests.
Deterring fraudulent acts: Limiting cash withdrawals helps mitigate the risk of fraudulent activities, such as identity theft and unauthorized transactions.
Promoting financial health: By encouraging responsible spending habits, withdrawal limits promote financial discipline and prudent money management.
Fostering savings culture: Withdrawal limits incentivize account holders to maintain a balance between spending and saving, thereby fostering a culture of financial prudence.

Managing withdrawal limits

Understanding your account's structure: Familiarize yourself with the terms and conditions of your account to ascertain the applicable withdrawal limits and transaction fees.
Leveraging alternative financial instruments: Explore alternative payment methods such as online transfers, mobile wallets, and electronic fund transfers (EFTs) to supplement cash withdrawals.
Proactive bank engagement: Regularly review your account statements and communicate with your bank to assess your eligibility for increased withdrawal limits or additional banking services.
Accounts with enhanced limits: Consider upgrading to premium banking accounts that offer higher withdrawal limits and exclusive benefits tailored to your financial needs.

FAQ:

1. What is the ATM Withdrawal Limit?

An ATM withdrawal limit refers to the maximum amount an individual can withdraw from their savings or current accounts within a specific period. The maximum limit differs from one bank to another and depends on the type of account.

2. What is the ATM Withdrawal Limit Per Day?

The ATM withdrawal limit per day refers to the maximum cash you can withdraw from your bank account daily. The majority of Indian banks' withdrawal limits per day range between Rs. 20,000 to Rs. 50,000 from an ATM, depending on your account type and banking specifics.

3. What is the Maximum Limit of ATM Withdrawal?

Different banks offer different maximum limits of ATM withdrawal to their customers. The cash withdrawal limit also depends on your account type in a particular bank account. Here are the maximum ATM withdrawal limits of some of the top banks in India.

4. Are there any charges for ATM withdrawals?

Banks typically provide customers with the freedom to make five withdrawals per month without any additional charges. However, after reaching this limit, a fee will be imposed for each subsequent withdrawal made at an ATM.

5. Can I request a cheque book from the ATM counter?

Yes, you can. You need to visit an ATM that offers the service. Insert your debit card and enter your PIN to access your account. Look for the option to apply for a new cheque book.

6. Is it possible to withdraw ₹30,000 from an ATM?

Yes, you can withdraw ₹30,000 from the ATM. However, before you withdraw money from an ATM, it is better to check with the bank whose ATM card you have and confirm the maximum amount that can be withdrawn at a time.

7. Can I withdraw 5 lakhs from the bank by cash?

To withdraw ₹5 lakhs in cash in a single day, you may need to make multiple transactions or contact your bank to inquire about any special arrangements or requirements.

8. What is the limit of cash withdrawal without TDS?

According to section 194N of the Act, TDS has to be deducted if a sum or aggregate of sum withdrawn in cash by a person in a particular FY exceeds: ₹ 20 lakh (if no ITR has been filed for all the three previous AYs), or. ₹ 1 crore (if ITRs have been filed for all or any one of three previous AYs).

9. How much money can we keep in a bank without tax?

The cash deposit limit in a savings account as per income tax is Rs.10 Lakh during a financial year. All banks or financial institutions must declare large cash deposits according to Section 114B of the Income Tax Act, 1962.

10. Why do banks set the ATM withdrawal limit?

Banks impose ATM withdrawal limits mainly for security reasons and to keep track of the movement of cash. Furthermore, by doing so, banks can ensure sufficient cash in hand to meet the customer’s other liquidity needs.

Naina Rajgopalan

Naina Rajgopalan has a thing for numbers and a deep fascination to learn about all things finance. She's been money-wise from a young age and has always shared her knowledge and tips with those around her. Being a part of the content team at Freo, a neobank that offers flexible and customised financial products, along with benefits such as insurance on balance, safe & secure banking, and so on, Naina stays updated with the latest of what happens in the banking and fintech industries. She has taken upon herself to share her knowledge with readers across all walks of life to help them manage their finances and budgets better, so they can make better decisions while spending, borrowing, investing and saving.