3. Processing Fee

Processing fee is the term used for the amount which a bank levies while processing a loan application of the borrower. This fee is usually a small percentage of the loan sanctioned. Sometimes as a marketing strategy, during the festival time, to attract more customers, banks reduce this processing fee.

4. No-frills Account

No-frills accounts is a synonym for 'zero' balance account. This is a special type of savings account provided by banks, in which you will not be bound to maintain a minimum balance. No, this will not restrict you from using free cheque book issuance or using netbanking facility.

5. MICR (Magnetic Ink Character Recognition)

MICR code, pronounced as my-ker, is a 9 digit number printed on cheques or a demand draft. It is printed by using a special type of ink made of magnetic material. The first 3 digits out of the 9, denotes the city. 4th to 6th digits denote the bank, whereas the last three digits denote the branch number of the bank. The code is interpreted by a machine which minimizes the chances of error in clearing of cheques and thus makes the funds transfer faster.

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