Bank Fees Malaysians Pay Without Realising: A Full Breakdown

Malaysian banks charge dozens of small fees that rarely show up in advertising. You lose money quietly, RM1 or RM25 at a time, often without a single notification. This guide names every common charge, states the exact amounts where confirmed, and tells you how to avoid each one.

Why these fees stay hidden

Banks are not obliged to remind you about fees you have already agreed to in the product disclosure sheet signed at account opening. Most Malaysians never re-read that document. Fee lines appear as small debits in monthly statements, easy to scroll past. Over a year, the total can exceed RM100 for an ordinary current account holder.

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1. Credit and charge card service tax (RM25 per card per year)

This is the single most-paid-and-least-understood bank fee in Malaysia. The government levies a RM25 service tax per principal credit or charge card per year under the Sales and Service Tax (SST) Act. Supplementary cards attract a further RM25 each. If you hold three credit cards plus two supplementary cards, that is RM125 in government tax before your bank charges a single sen.

The tax is collected by the card issuer and remitted to the Royal Malaysian Customs Department. It appears on your statement as “Government Service Tax” or “GST/ST” and is non-waivable. You cannot negotiate it away by spending more. The only way to avoid it is to close the card.

Key rule: Debit cards are exempt from this tax. If you are a light credit card user, switching to a debit card eliminates this charge entirely.

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2. Credit card annual fees (RM0 to RM800+)

Separate from the government tax, banks charge their own annual fee for maintaining your credit account. Amounts vary widely:

Card tier	Typical annual fee	Common waiver condition
Entry / no-frills	RM0 (free for life)	None needed
Mid-range	RM98 to RM195	Minimum annual spend RM10k to RM15k
Premium / World	RM300 to RM800+	Often non-waivable

Many banks have tightened waiver conditions in recent years. UOB, for example, introduced a minimum annual spend requirement for fee waivers effective January 2026. If you do not meet the threshold, the fee hits automatically on your anniversary month. Banks are legally required to notify you before charging, but the notice often arrives as a single SMS or email that is easy to miss.

Action: Call your bank at least 30 days before your anniversary month. Most banks will waive the fee if you ask politely and have a reasonable spending history, even if you fall short of the stated threshold.

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3. Dormancy and inactivity fees

Bank Negara Malaysia (BNM) defines a bank account as dormant after 12 consecutive months with no customer-initiated transactions. Once an account is classified dormant, most banks charge an annual fee, typically RM10 per year, deducted directly from the remaining balance.

If the balance falls to zero, the account may be closed. Unclaimed funds held for more than seven years are transferred to the Registrar of Unclaimed Moneys under the Unclaimed Moneys Act 1965. You can still reclaim them, but the process requires a formal application.

Dormancy is especially common with:

• Old savings accounts opened for a specific purpose (school fees, a holiday fund) and then forgotten
• Joint accounts where both parties assume the other is managing it
• Accounts held at a bank you switched away from

Action: Do a quick audit of all your bank accounts. Log in to each one. If you find a near-dormant account, make a small transaction, then decide whether to keep it or close it formally to receive any remaining balance.

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4. ATM and interbank transaction fees

Own-bank ATM withdrawals

Withdrawals from your own bank’s ATM are free.

Interbank ATM withdrawals (MEPS network)

When you withdraw cash from another bank’s ATM using the shared MEPS network, a fee of RM1 per withdrawal applies. BNM eliminated this fee during the pandemic as a relief measure, but it was reinstated. For frequent cross-bank ATM users, this adds up quickly.

Digital fund transfers

BNM has kept digital transfer fees low to encourage cashless payments:

Transfer type	Cap per transaction
Interbank GIRO (IBG)	RM0.10
Instant Transfer (IBFT)	RM0.50
DuitNow Transfer	Typically free

These caps are set by BNM and apply across all licensed banks (source: BNM e-payment services schedule). Some banks charge below the cap or waive entirely for online banking users. Check your bank’s fee schedule at bnm.gov.my/e-payment-services-and-fees.

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5. Below-minimum-balance fees

Most savings and current accounts require you to maintain a minimum balance to avoid a monthly service charge. The fee varies by product:

Account type	Typical minimum balance	Monthly fee if below
Basic Savings Account	RM20	None (BNM-mandated)
Standard savings account	RM500 to RM1,000	RM5 to RM15/month
Current account	RM1,000 to RM5,000	RM10 to RM20/month

BNM requires every licensed bank to offer a Basic Banking Account with a maximum minimum balance of RM20 and no maintenance fee. This account is available to all Malaysians and is designed to ensure financial inclusion. If you rarely use an account, downgrading to a Basic Account eliminates maintenance fees.

Eligible groups for automatic Basic Account treatment include senior citizens (aged 60 and above), full-time students, recipients of welfare assistance, persons with disabilities, and those in rural areas with limited connectivity.

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6. Cheque book and cheque-processing fees

Cheque usage has declined sharply, but many Malaysians still hold current accounts with chequebooks. Fees to be aware of:

• Cheque book issuance: RM10 to RM12 per book (typically 25 or 50 leaves), charged at issuance
• Returned cheque (dishonoured): RM50 to RM150 per dishonoured cheque, depending on the bank and reason
• Stop payment instruction: RM10 to RM25 per request

A dishonoured cheque also carries legal consequences under the Contracts Act and can affect your CCRIS record if related to a credit facility. The financial penalty alone makes it worth ensuring sufficient funds before issuing any cheque.

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7. Paper statement fees

With digital banking normalised, banks have moved aggressively to discourage paper statements. Most banks now charge RM1 to RM5 per paper statement for accounts that have been opted in to e-statements. Some banks charge a flat quarterly or annual fee instead.

If you have never changed your statement preference and your account was opened before e-statements became standard, you may still be on paper delivery and paying monthly. Log in to your internet banking portal and check under “Statement Preferences” or “Account Settings.”

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8. Inactive service tax on financial services (July 2025 update)

Effective 1 July 2025, the government expanded the service tax scope for certain financial services. However, the banking groups (ABM and AIBIM) confirmed that core consumer banking services are exempt. Services that remain free of service tax include:

• Cash deposits and withdrawals
• Local fund transfers (IBG, IBFT, DuitNow)
• Debit card issuance and annual fees
• ATM and branch bill payment
• Paper and electronic statement printing

The expanded service tax applies only to selected corporate, treasury, and investment banking services. For ordinary Malaysians with retail savings, current, or fixed deposit accounts, this expansion does not add new charges.

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Fee avoidance: a practical checklist

• Count your credit cards. Each one costs RM25 in government service tax per year. Keep only cards you actively use.
• Know your anniversary date. Call 30 days before to request an annual fee waiver.
• Audit forgotten accounts. One dormant account losing RM10 a year is harmless; five are RM50 a year for nothing.
• Use DuitNow or IBG for transfers instead of over-the-counter transfers, which carry higher fees.
• Switch to e-statements if you do not need paper records.
• Check your account’s minimum balance. If you regularly dip below, either top up or move to a no-minimum account.
• Ask about Basic Banking Accounts if you are a student, senior, or low-income earner.

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Key takeaways

• The RM25 government service tax on credit cards is mandatory and applies per card per year, including supplementary cards.
• Dormant accounts (inactive for 12 months) attract an annual RM10 fee and eventually transfer unclaimed funds to the Registrar of Unclaimed Moneys after seven years.
• Interbank ATM withdrawals cost RM1 each; digital transfers via IBG or IBFT cost RM0.10 to RM0.50.
• BNM mandates a Basic Banking Account at every licensed bank, capped at RM20 minimum balance with no maintenance fees.
• The July 2025 service tax expansion does not add new charges to ordinary consumer banking services.
• Paper statements, cheque books, dishonoured cheques, and below-minimum-balance situations each carry distinct fees that are easy to avoid once you know they exist.

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Frequently asked questions

How much is the government service tax on credit cards in Malaysia?

RM25 per principal card per year, and RM25 per supplementary card per year. It is collected by your bank but remitted to the government. It cannot be waived.

What happens to my dormant bank account in Malaysia?

After 12 months of inactivity, the bank classifies the account as dormant and typically charges RM10 per year. After seven years of dormancy, the remaining balance is transferred to the Registrar of Unclaimed Moneys. You can still claim it back by applying through the official process.

Is the interbank ATM fee in Malaysia permanent?

Yes. BNM waived the RM1 MEPS interbank ATM fee during the pandemic as a temporary relief measure, but it has since been reinstated. Use your own bank’s ATM or digital transfers to avoid it.

Can I avoid credit card annual fees in Malaysia?

You can often negotiate a waiver by calling your bank before the anniversary date. Banks generally waive for customers with reasonable spending activity. Cards marketed as “free for life” carry no annual fee at all, though the RM25 government service tax still applies.

What is a Basic Banking Account and who qualifies?

A Basic Banking Account is a BNM-mandated product available at every licensed bank. It requires a minimum balance of no more than RM20 and carries no maintenance fee. It is open to all Malaysians, with priority access for senior citizens, students, welfare recipients, persons with disabilities, and rural residents with poor connectivity.

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For more on managing your money in Malaysia, read our guides on banking and cash management and how bank interest on savings and fixed deposits works in Malaysia.