New KYC rules updates: 5 Important Money Rules to Know for May

May brings some financial changes that could affect your day-to-day banking, mutual fund investments, and more. These changes include new Know Your Customer (KYC) rules, revisions to fees on savings accounts, changes to senior citizen fixed deposits, and additional surcharges on utility payments when using credit cards. Here’s a detailed breakdown of these changes:

1. Name Mismatch in Mutual Fund Applications Will Result in Rejection**
Starting April 30, 2024, the Securities and Exchange Board of India (SEBI) implemented new KYC rules that require the name on your mutual fund application to match exactly with your Permanent Account Number (PAN) card. This is aimed at standardizing how your name appears across official records. If there’s a mismatch, your application will be rejected. This applies to new mutual fund investments, not existing ones. To avoid rejection, ensure your name and date of birth on mutual fund applications match your PAN card and income-tax records.

2. ICICI Bank Revises Fees for Savings Account Services
Effective May 1, 2024, ICICI Bank is revising its fees for various services related to savings accounts. Some of the notable changes include:
– An annual fee of up to ₹200 for debit cards (₹99 for rural locations).
– No charge for the first 25 cheque leaflets, but ₹4 per leaflet after that.
– Outward Immediate Payment Service (IMPS) transactions will incur charges between ₹2.5 to ₹15 depending on the amount transferred.
– A charge of ₹100 for cancelling or revalidating a demand draft or pay order, as well as for signature attestation and stop-payment of a cheque through a bank branch.
– Penalty charges of ₹500 per Electronic Clearing Service (ECS) or National Automated Clearing House (NACH) debit returns for financial reasons (maximum of three instances per month).

3. YES Bank Increases Charges for Low Balance in Savings Accounts
YES Bank has increased the maximum fees for maintaining less-than-required average monthly balance (AMB) in savings accounts. Depending on the type of account, bank branch location, and shortfall amount, the charges range from ₹250 to ₹1,000 (previously ₹250 to ₹750). Additionally, the charge for ECS returns due to insufficient funds is ₹500 for the first instance and ₹550 for the second and subsequent returns.

4. HDFC Bank to Discontinue Senior Citizen Care Fixed Deposit (FD)
The last day to invest in HDFC Bank’s Senior Citizen Care FD is May 2, 2024. This special FD offers an interest rate that’s 0.75 percentage points higher than regular FDs. It’s designed for resident senior citizens aged 60 years or older, with a deposit limit under ₹5 crore for a tenure of five years and one day to 10 years.

5. Surcharges on Utility Payments with Credit Cards
Starting May 1, 2024, YES Bank and IDFC First Bank have introduced a surcharge on utility transactions when paying with credit cards. Utility expenses include telecommunications, electricity, gas, water, internet services, and cable services.
– YES Bank will charge a 1 percent surcharge plus GST when utility bill payments with a credit card exceed ₹15,000 in a statement cycle. Below this threshold, there’s no surcharge.
– IDFC First Bank applies a similar surcharge for credit card utility payments that exceed ₹20,000 in a statement cycle.

These changes will affect how you manage your finances, so it’s essential to review your accounts, update your information, and adjust your spending habits to avoid unexpected charges and ensure compliance with new rules.