Understanding All the Bank Charges on Your Bank Account in Nigeria

You check your account balance and the number is lower than you expected. You did not spend that money. You did not make a large transfer. But something came out — a small deduction here, another one there, a mysterious line that just says "charge" or "VAT" or "SMS fee."

This happens to almost every Nigerian bank customer. And the frustrating part is not just the money. It is the confusion. Banks rarely explain what they have taken or why. So you are left guessing, accepting, or quietly losing small amounts every month without fully understanding where it went.

But the good news is that most of these charges have clear explanations. Some are regulated by the Central Bank of Nigeria. Some are set by your individual bank. And some are worth questioning.

This guide breaks down the common charges that reduce your bank balance in Nigeria, explains why they exist, and tells you what you can realistically do about them.

Nigerian banks are permitted to charge you for several services — including transfers, ATM withdrawals at other banks, card issuance, SMS alerts, and current account maintenance. These charges are partly regulated by the Central Bank of Nigeria (CBN) and partly determined by individual bank policies. VAT is added on top of most service charges. Some deductions are normal. Others need a closer look. You have the right to ask questions and dispute unexplained charges.

Common bank charges in Nigeria and what they mean

Transfer charges

When you send money to another bank, a transfer fee applies. The CBN caps these fees in its Guide to Charges. Under the version revised in 2026:

• Up to ₦5,000: free
• ₦5,000 to ₦50,000: ₦10
• Above ₦50,000: ₦50

Transfers within the same bank are usually free.

What matters to know is this: transfer fees are regulated. Banks cannot simply charge whatever they want. If a fee looks higher than these caps, compare it with your bank's published tariff and ask.

Two things are often added on top: VAT on the bank's fee, and ₦50 stamp duty if you send ₦10,000 or more. So a ₦20,000 interbank transfer typically shows a ₦10 fee plus a ₦50 stamp duty line. This is not an error — it is how transfer costs work in Nigeria now.

VAT on banking services

VAT — Value Added Tax — is a government tax that applies to many services in Nigeria, including banking services. The rate is 7.5 percent, and the 2026 tax reform laws kept it there.

This means that when your bank charges you for a transfer, ATM withdrawal, card issuance, or other services, it adds 7.5 percent of that charge as VAT and remits it to the Nigeria Revenue Service (NRS), which replaced the Federal Inland Revenue Service (FIRS) in 2026.

The VAT is not a bank invention. The bank is simply collecting it on behalf of the government.

So if you see "VAT" on your statement next to a banking fee, it is a legitimate line item — not a hidden extra. It is the government's cut of the service charge.

ATM withdrawal charges

Using an ATM is not always free in Nigeria. The rules changed on 1 March 2025:

Your own bank's ATM Free, whether the machine is at a branch or off-site.

Another bank's ATM (interbank withdrawals) ₦100 for every ₦20,000 you withdraw. If the machine is away from a bank branch (off-site, such as in a mall or filling station), the owner can add a surcharge of up to ₦500 per withdrawal, which must be shown on screen before you confirm.

The old allowance of three free withdrawals a month at other banks' ATMs has ended. If you regularly withdraw cash, using your own bank's machines is the simplest way to avoid these costs.

Card maintenance fees

Under the CBN's revised 2026 Guide to Charges, banks can no longer charge maintenance fees on naira debit and credit cards. If you still see a card maintenance deduction on a naira card after May 2026, query it.

You can still be charged for:

• Issuing or replacing a card: up to ₦1,500 for a standard naira card. Virtual cards are free.
• Foreign currency cards: an annual maintenance fee can still apply.

SMS alert charges

SMS alerts tell you every time money moves in or out of your account. They are one of the most important tools you have for catching fraud quickly.

Banks can still charge for SMS alerts on transactions you make, but only on a cost-recovery basis — roughly what the bank pays the network to send the message. The charge per message is small, but it adds up across many transactions.

Email alerts are free under the 2026 guide, and most banks send free in-app notifications. Turning off alerts entirely is not advisable. But if you are comfortable monitoring your account through email or your banking app, switching can reduce what you pay.

Account maintenance fees

Current accounts in Nigeria can attract a current account maintenance fee (CAMF), charged on customer-initiated debits. Under the 2026 guide, it is capped at ₦0.50 per ₦1,000 of debits in 2026 and is scheduled to be abolished in 2027.

Savings accounts do not attract this charge. If you notice a monthly maintenance deduction on a savings account, ask your bank to explain it.

USSD transaction charges

USSD banking — the shortcode service you use by dialling *737#, *901#, or similar codes — became popular in Nigeria because it does not require internet access. It works on any phone.

After years of disputes between banks and telecom companies, the rules are now settled: each USSD session costs ₦6.98 for up to 120 seconds, and since 3 June 2025 it is deducted from your airtime, not your bank account. Your phone will ask you to accept the charge before the session starts.

If you use USSD banking regularly and want to reduce costs, using your bank's app over a data connection may be cheaper — provided you have reliable data access.

Stamp duty

Stamp duty is a government charge, not a bank fee. Since 1 January 2026, under the Nigeria Tax Act 2025, a flat ₦50 is charged on electronic transfers of ₦10,000 or more, and the sender pays it. Before 2026, the receiver paid it.

Transfers below ₦10,000, salary payments, and transfers between your own accounts at the same bank are generally exempt. Our guide to stamp duty on bank transfers explains the details.

Charges from using a POS terminal or making card payments

When you pay with your debit card at a store, the CBN's 2026 guide says the cardholder should not be charged: the merchant pays a service charge of 0.5% of the transaction, capped at ₦10,000. If a shop insists on adding a "POS charge" to a card payment, that cost is meant to be the merchant's, not yours. (Cash withdrawals from POS agents are different — agents set their own fees.)

Your bank may also apply a small charge for some card transactions, particularly for international payments or transactions in foreign currencies.

If you use your card for international purchases, your bank may apply a foreign exchange conversion charge on top of the exchange rate used.

Why do these charges exist?

Banks are businesses. Operating the infrastructure behind your account — the payment rails, ATM networks, mobile apps, SMS gateways, customer service centers, card printing and management systems — costs money.

Transfer fees help banks recover the cost of processing payments through systems like NIBSS (Nigeria Inter-Bank Settlement System). ATM charges help maintain ATM networks. Card fees cover card management and fraud monitoring systems.

Some charges, like VAT and stamp duty, are not bank revenue at all — they are government taxes that banks collect and pass on.

The frustration most people feel is not really about whether the charges are legitimate. It is that banks rarely communicate them clearly. Your statement shows a deduction, not an explanation. That gap is where the confusion begins.

Which charges are normal and which ones deserve attention

Generally normal and expected

These charges are common, regulated or disclosed, and apply across most banks:

• Transfer fees within the CBN caps (free up to ₦5,000, ₦10, or ₦50)
• VAT on service charges
• ATM charges at other banks' machines
• SMS alert fees on a cost-recovery basis
• Current account maintenance fees (until 2027)
• ₦50 stamp duty when you send ₦10,000 or more

These do not mean you have to accept them without question, but they are standard parts of banking in Nigeria.

Charges that deserve a closer look

A deduction with no clear description If money leaves your account and your statement shows only a vague reference — or nothing at all — that is worth following up. Legitimate bank charges should have a traceable description.

Multiple charges for the same transaction If you make a single transfer and see three separate debits for it, something may have gone wrong. Follow up with your bank.

Charges significantly higher than the CBN-approved range Transfer fees, for instance, have regulated caps. If what you are being charged seems far outside normal range, verify with the CBN's published guidelines or your bank's official fee page before assuming it is correct.

Recurring debits you do not recognize These could be subscription charges from third-party services you signed up for at some point, or they could be unauthorized. Check your transaction history for the originating service name. If you cannot identify it, contact your bank.

Charges on a dormant or lightly used account If an account you rarely use is losing money every month, ask why. Under the 2026 guide, reactivating a dormant account is free, and naira card maintenance fees should no longer apply.

A card maintenance fee on a naira card These were scrapped in the 2026 guide. If one still appears after May 2026, ask your bank to reverse it.

How to reduce unnecessary bank charges

You probably cannot eliminate all bank charges — some are unavoidable parts of banking. But there are practical steps that can reduce what you pay.

Use your own bank's ATM for cash withdrawals Your own bank's ATMs are free. Every withdrawal at another bank's ATM costs ₦100 per ₦20,000, and off-site machines can add up to ₦500 more.

Use transfer apps or your banking app instead of branch transfers In many cases, digital transfers cost less than branch-initiated transfers. Make sure you understand what your bank charges for each channel.

Switch to email or in-app alerts if your bank offers this option If SMS alerts are costing you money and you are comfortable checking your banking app for notifications, ask your bank whether a lower-cost alert option is available.

Send fewer, larger transfers Every transfer of ₦10,000 or more attracts ₦50 stamp duty plus the bank's fee. Paying someone ₦30,000 once costs about ₦60; paying ₦10,000 three times costs about ₦180.

Use accounts that match your actual needs Current accounts carry a maintenance fee until 2027; savings accounts do not. If you have a current account but your needs are simpler, ask whether a savings account would serve you better.

Check your bank's current fee schedule Most Nigerian banks publish their fee schedules on their website or in their help centers. Reading this once is worth it — it shows you exactly what you should expect to see on your statement.

Track your transactions regularly The most practical thing you can do is monitor your account regularly. Unexplained charges are easier to catch and dispute quickly when they are fresh.

What to do if you notice a suspicious or unexplained charge

Do not ignore it and do not panic. Here are the steps to take.

Step 1: Check your transaction history Look at the description attached to the deduction. Many bank apps and statements use shortcodes that are not always clear. Sometimes what looks suspicious is a recognizable charge with an abbreviated label.

Step 2: Check whether you have any active subscriptions Streaming services, fintech apps, and other platforms can charge your account if your card details are stored with them. Check whether you authorized any recurring payment that matches the amount.

Step 3: Contact your bank directly Call your bank's customer service line, use the in-app chat, or visit a branch. Ask them to identify the specific deduction by date and amount. Legitimate charges can always be explained.

Step 4: File a dispute if the charge cannot be explained If your bank cannot explain the deduction or confirms that it was applied in error, ask them to raise a dispute or reversal. Most Nigerian banks have a formal dispute process. Get a reference number for your complaint.

Step 5: Escalate to the CBN if your bank does not resolve it The Central Bank of Nigeria has a Consumer Protection Department that handles unresolved banking complaints. Email cpd@cbn.gov.ng or write to any CBN branch, attaching your bank's complaint reference number. The CBN expects you to give your bank about two weeks first. This is your right as a bank customer.

Conclusion

The charges on your bank account are real, but they are not mysterious once you understand what each one is for. Transfer fees, VAT, stamp duty, SMS alerts, ATM charges, account maintenance — each has an explanation, and most are either regulated or disclosed somewhere in your bank's fee schedule.

The problem is that banks rarely explain them clearly in the moment. That is why your statement feels confusing.

Now that you know what to look for, you can do three things: track your account regularly, understand which charges are standard, and question anything that does not fit. You do not have to accept an unexplained deduction quietly. You have the right to ask, and you have the right to dispute.

Frequently asked questions

Why does my bank deduct money even when I do not make any transactions? SMS alert fees and current account maintenance fees can appear without you making a transfer. Naira card maintenance fees were scrapped in 2026, so if you still see one, ask your bank to explain or reverse it.

Is VAT on bank charges legal? Yes. VAT is a government tax at a rate of 7.5 percent and applies to banking services in Nigeria. It is collected by the bank on behalf of the Nigeria Revenue Service (NRS), formerly FIRS.

Can I get a refund if my bank charges me wrongly? Yes. If your bank confirms that a charge was applied in error, you can request a reversal. Raise a complaint with your bank's customer service and ask for a reference number. If the bank does not resolve it, you can escalate to the CBN Consumer Protection Department.

What is the difference between a transfer fee and stamp duty? A transfer fee is what your bank charges for processing a payment. Stamp duty is a separate ₦50 government charge on transfers of ₦10,000 or more, paid by the sender since January 2026. They are both deductions, but they go to different places.

How can I find out exactly what my bank charges? Visit your bank's official website and look for their fee schedule, tariff guide, or pricing page. Most Nigerian banks publish this. Your bank's help center or customer service team can also provide the current list of charges that apply to your account type.

Why is my ATM charge different when I use another bank's machine? Your own bank's ATM is free. A different bank's ATM charges ₦100 per ₦20,000 withdrawn, and off-site machines can add up to ₦500, which must be shown on screen before you confirm.

What should I do if I keep getting debits I cannot identify? Check your transaction history for the source description. If you still cannot identify it, contact your bank immediately. Unrecognized recurring debits may indicate an unauthorized subscription or, in more serious cases, fraud. Act quickly — disputes are easier to resolve when they are raised promptly