Bank Guarantee Commission Calculator
A bank guarantee is quoted as a percentage per annum, but what leaves your account is a lump sum for the full tenor, plus tax, plus stamp duty — and often a minimum that overrides the percentage entirely on small guarantees.
How this was calculated
Commission = max( Guarantee amount × 1.5% × 15 ÷ 12 , minimum of ₹ 2,500 )
Total upfront = Commission + GST + Stamp duty
Margin money is shown separately because it is blocked, not spent — but it is capital you cannot use for the tenor.
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What you actually pay
Commission is charged for the guarantee period, usually including a claim period after expiry, and is typically collected upfront. On top sits GST on the commission, and stamp duty on the guarantee instrument, which is a state subject and therefore varies by where it is executed. Most quoted surprises come from the last two, not the first.
The minimum commission trap
Nearly every bank sets a floor. On a small, short-tenor guarantee the floor is frequently higher than the percentage calculation, so the effective cost is far above the headline rate. This calculator applies the minimum you enter, and tells you when the minimum is what bound.
Margin money is a cost too
The cash margin or fixed deposit a bank holds against the guarantee is not a fee, but it is money you cannot use for the tenor. When comparing two quotes, the one with a lower commission and a much higher margin requirement is often the more expensive of the two.
Common questions
Products this calculator relates to
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