How Hidden Bank Charges Are Draining Your Savings in Nigeria

Putting money in the bank should help your savings grow, but many account holders find their balances shrinking faster than expected. That’s often because of hidden fees and charges that go unnoticed until it’s too late. 

By the time you check your statement, the fees have already eaten into your hard‑earned money. 

Here’s a detailed look at some of the most common bank fees in Nigeria, why they exist, and what you can do to protect your funds.

1. Maintenance and Dormancy Charges

Most Nigerian banks require customers to keep a minimum balance in their accounts, often between ₦5,000 and ₦10,000. If your balance drops below this threshold, you may be hit with a monthly “maintenance fee” that can range from ₦200 to ₦1,000. Accounts left inactive or unused for six months or more attract a separate “dormancy fee,” which is typically around ₦500 to ₦1,000 per month. Over a year, these charges can add up to as much as ₦12,000—money that could have been earning interest elsewhere.

Why It Happens: Banks say these fees cover the cost of maintaining customer records and the technology that powers your account. However, many customers feel surprised when small inactivity or low-balance charges appear.

Your Move: Stay active by making at least one small transaction every few months—deposit ₦1,000 or withdraw ₦1,000, for example. If you rarely use an account, consider consolidating your funds into a more active account or closing the inactive one to avoid charges.

2. ATM Withdrawal Fees

Using an ATM is meant to be convenient, but after a few free withdrawals, fees kick in. Many banks offer between 3 and 5 free ATM withdrawals per month; after that, each additional withdrawal can cost between ₦65 and ₦100. Withdrawals from another bank’s ATM can be even pricier, sometimes up to ₦200 per transaction in certain locations.

Why It Happens: ATM fees help banks cover the cost of network maintenance, cash replenishment, and security for their machines. They also serve as an incentive for customers to use digital channels instead of cash.

Your Move: Plan for your cash needs. If possible, withdraw larger sums in fewer transactions at your own bank’s ATM. You can also use your bank’s mobile or internet banking services to pay bills and transfer funds instead of withdrawing cash.

3. Transfer and Payment Charges

Every time you send money to another bank account, you often pay a fee. Inter‑bank transfers via the NIBSS Instant Payment (NIP) system usually cost around ₦20 per transaction. Some banks also charge fees for mobile or internet bank transfers above certain thresholds—often ₦50 to ₦100 for amounts over ₦100,000. Regular payments such as school fees, utility bills, or market purchases can quickly rack up these fees.

Why It Happens: Transfer fees help banks manage the costs of the interbank settlement systems and reduce frivolous small transfers. They also generate revenue for the bank.

Your Move: Group your payments where possible. If you have multiple bills or school fees to pay, try to send one bulk transfer rather than several smaller ones. Also check if your bank offers fee-free limits for certain services, like local peer-to-peer transfers.

4. SMS and Alert Fees

Instant SMS alerts for transactions can protect you against fraud and keep you informed, but each SMS alert often costs ₦65 or more. If you receive 20 alerts in a month, that’s an extra ₦1,300 off your balance.

Why It Happens: SMS fees cover the cost banks pay mobile operators for sending messages. They also discourage customers from requesting too many low-value alerts.

Your Move: Log in to your internet banking portal or mobile app to adjust your alert preferences. Disable alerts for small transactions and keep only those you really need, such as large withdrawals or transfers above a set amount.

5. Card Renewal and Inactivity Fees

Debit and ATM cards usually come with a validity period—often one to two years—after which you must renew them. Renewal fees range from ₦500 to ₦2,000. If you don’t use your card for purchases or ATM withdrawals, some banks label it “inactive” and apply extra fees.

Why It Happens: Renewal fees cover the cost of printing and mailing new cards, and inactivity fees encourage card usage, which reduces reliance on cash.

Your Move: Use your debit card for at least one transaction every six months, such as buying airtime or paying for a subscription, to keep it active. Set up a small recurring payment, like a monthly streaming subscription, to maintain card activity without extra effort.

6. Overdraft and Naira Sweep Costs

If you accidentally spend more than your available account balance, you trigger an overdraft. Overdraft fees are typically between ₦500 and ₦1,000 per instance. Some banks also push excess funds into a linked “sweep” account at a higher interest rate, but with its own fees, meaning funds move automatically, but costs can eat into your savings.

Why It Happens: Overdraft and sweep services are meant to protect you from declined transactions, but they carry fees that can add up quickly if you’re not careful.

Your Move: Keep close track of your balance using your bank’s mobile app, where you can set up low-balance alerts. Avoid spending more than you have by checking your balance before making large purchases.