Key money changes in May: Some private banks might announce rate cuts on home loans for existing and new borrowers. Also, banks are hiking charges on ATM transactions.
Home loan interest rates are set to dip further in May, with the RBI on April 9 reducing the repo rate by 25 basis points
April was the month of far-reaching money changes. May is not a match for its predecessor, but will still keep you on your toes.
For one, you will have to shell out more for ATM transactions beyond your free limit, while home loan borrowers can expect some relief with interest rates likely to dip further.
Moreover, tax season is just around the corner, and it’s time to get your documents in order for a smooth income tax return (ITR) filing process.
ATM charges to increase from May
The Reserve Bank of India (RBI) has approved a hike in ATM interchange fees, effective May 1. An ATM interchange fee is a charge that one bank pays to another for offering ATM services to customers. For transactions exceeding the monthly free limit, banks can charge up to Rs 23 per transaction, applicable to both financial and non-financial transactions, plus applicable taxes. The revised fees apply to transactions at both traditional ATMs and Cash Recycler Machines (CRMs).
Several banks, including HDFC Bank, Punjab National Bank (PNB), and IndusInd Bank, have notified their customers about the updated ATM transaction charges.
For instance, HDFC Bank’s website states that starting May 1, 2025, ATM transaction charges beyond the free limit will be revised from Rs 21 plus taxes to Rs 23 plus taxes, wherever applicable. The bank provides its savings and salary account holders with a certain number of free ATM transactions per month. This includes five free transactions at HDFC Bank’s own ATMs and three free transactions at other banks’ ATMs in metro cities. For non-metro cities, account holders get five free transactions at other banks’ ATMs. Beyond these limits, charges will apply.
For HDFC Bank ATM transactions, charges will only apply to cash withdrawals beyond the free limit, while non-financial transactions such as balance enquiries, mini statements, and PIN changes will remain free. However, for transactions at non-HDFC Bank ATMs, both financial and non-financial transactions will be considered for levying the charges beyond the free limit.
Similarly, PNB’s website states that effective May 9, 2025, charges for transactions exceeding the free limit at other banks’ ATMs will be revised to Rs 23 per financial transaction and Rs 11 per non-financial transaction, plus GST.
Home loan rates to dip further in May after RBI’s repo rate cut
Home loan interest rates are set to dip further in May, with the RBI on April 9 reducing the repo rate by 25 basis points, the second such cut since February 7, 2025. The repo rate now stands at 6 percent, down from 6.25 percent after the monetary policy committee (MPC) decision.
Some banks may pass on the benefits of the RBI’s April repo rate cut to their customers by reducing their RLLR (repo rate linked lending rates). This will directly benefit home loan borrowers, particularly existing borrowers. The interest burden will go down, providing relief to homeowners.
All new retail floating-rate loans sanctioned after October 1, 2019 are linked to an external benchmark, which is the repo rate for most banks.
Gather essential documents for ITR filing
To file your Income Tax Return (ITR), you’ll need to gather essential documents. This includes bank statements showing interest earned in savings accounts, interest certificate for a home loan, capital gains document for sale of stocks, mutual funds or property, invoices, receipts, and bank statements in case of freelance income, and so on.
Organise all your documents, either physically or digitally, to ensure easy access. Verify the accuracy of each document, making sure they’re up to date. If you’re unsure about any document or tax-related query, consider consulting a tax professional. By collecting and organising your documents, you’ll be well-prepared for a smooth ITR filing process after receiving form-16 from your employer in June.
Source: www.moneycontrol.com
