If you have a bank account, you also have a debit-cum-ATM card. But how much can you withdraw from your bank’s ATM? Not more than Rs 15,000 a day, did you say? You will be in trouble if you need Rs 25,000 in cash for some exigency in the dead of night.

What do you do when you have to send money to someone who is in another city? You certainly don’t write out a cheque. You would rather go to your bank, draw a demand draft and send it to the person, right?

Does your bank give you a personal accident cover at no extra cost or a preferential rate of interest on loans?

You can get all these facilities and many more if you maintain a few tens of thousands of rupees as a minimum average balance in your account. Privilege banking is no longer the exclusive preserve of high net-worth individuals.

Foreign and private banks have been offering a clutch of value-added services, including discounts on different service charges and loan rates, to customers who maintain a minimum balance of Rs one lakh or more in a single account.

In this way, they increased their low-cost deposits as a percentage of total deposits; banks do not pay interest on current accounts and pay a 3.5 per cent interest on savings accounts.

But now with the deposit rates moving up, public sector banks are taking greater initiatives to raise low-cost deposits by dicing up their savings and current accounts into ‘silver’, ‘gold’ and ‘diamond’ categories, depending on the minimum balance maintained in the account on a quarterly or monthly average basis, and offering value-added services in accordance with the account category. Uco Bank has recently categorised its savings and current accounts into ‘elite’, ‘gold’ and ‘platinum’ classes.

A savings account with a minimum quarterly average balance of Rs 25,000 is an Uco Elite account.

The account holder gets a free personal accident insurance of Rs one lakh. In comparison, a Uco Gold account (where the minimum balance is Rs 50,000) holder gets a free accident cover of Rs two lakh.

Moreover, Gold account holders get a 25 per cent discount on demand draft charges (for ordinary accounts, the bank charges Rs 30 per Rs 1,000), while the discount is 50 per cent for platinum account holders.

Privilege account holders also get many other services at a discount or at no extra cost.

For example, Bank of India doesn’t issue multicity (which are payable at par in other cities) cheque books to its ordinary account holders.

If one applies for such cheques, the bank charges a fee between Rs 3 and Rs 3.50 per leaf. But for its Diamond Savings or Diamond Plus Savings or Gold Current account holders, the charges are nil.

Besides, banks are giving overdraft facilities up to the minimum average balance kept in the account, instant credit to outstation cheques, higher limit for withdrawal of cash from ATMs, free withdrawal of cash from other banks’ ATMs and, at times, four to six free remittances of money per month (through DD, telegraphic transfer, pay order, etc).

Now, almost every public sector bank has started offering such privilege banking facilities, including doorstep banking and private banking, where there is a relationship manager and an investment adviser.

The savings in the form of discounts and convenience are significant if you have frequent banking transactions. But the size of the minimum balance does not fit everyone's pocket. But one can hope that the minimum balance will come down with greater competition among banks.