Bank fee
{{Short description|Fees charged by banks for various services}}
{{Use dmy dates|date=January 2024}}
A bank fee or a bank charge includes charges and fees made by a bank to their customers exclusive of interest payments. In common parlance, the term often relates to charges in respect of personal current accounts or checking account.{{cite news |url=https://www.cnbc.com/select/how-to-avoid-bank-fees/ |title=7 common banking fees and how to avoid them |date=October 23, 2024 |publisher=CNBC }}{{cite web |url=https://www.consumer.org.nz/articles/bank-fees |title=Bank accounts and fees |publisher=Consumer NZ |access-date=January 14, 2025 }}
These charges may take many forms such as monthly charges for the provision of an account, specific transaction charges such as withdrawal and transfer fees, ATM usage fees, debit card fees for doing a card transactions above a preset limit per month, credit card fees, loan establishment fees, early termination fees, and minimum account balance fees.{{cite news |url=https://www.theguardian.com/australia-news/2024/oct/16/debit-card-purchase-transaction-fees-australia-government-law-changes |title=Australia’s pesky fee for debit card purchases may be about to disappear. What happens next? |date=October 15, 2024 |publisher=The Guardian }} They also include overdraft fees or non-sufficient funds (NSF) fees for exceeding authorized overdraft limits, or making payments (or attempting to make payments) where no authorized overdraft exists.{{cite web |url=https://www.theguardian.com/money/blog/2009/jun/23/canadian-bank-charges |title=Canada: Where bank charges are usual |date=June 23, 2009 |publisher=The Guardian }}
History
A banks main source of income is interest charges on lending but bank fees have been a minor but important part of a banks income since the early days of banking. Bank fees were initially designed to recover the cost of processing transactions such as cheques. The overdraft fee was also designed as a penalty for unauthorised lending from the bank, but regulators and governments have pushed back against fees that are designed as penalties. Consumer laws in a number of countries have forced banks to not charge fees beyond what is reasonably necessary to recover their costs.{{cite web |url=https://www.rbnz.govt.nz/hub/publications/financial-stability-report/financial-stability-report-for-may-2022/bank-fees-and-financial-system-efficiency |title=Bank fees and financial system efficiency |date=May 4, 2022 |publisher=Reserve Bank of New Zealand }}
In general bank fees have been declining due to the digitalisation of banking and economies of scale.{{cite web |url=https://www.rba.gov.au/publications/bulletin/2024/jan/bank-fees-in-australia.html |title=Bank Fees in Australia |date=January 24, 2024 |publisher=Reserve Bank of Australia }} However new transaction fees have been introduced as new payment methods have been developed such as credit card fees and interchange fees.{{cite web |url=https://www.self.inc/info/history-banking-fees-charges/ |title=History of Banking Fees and Charges in America |access-date=January 14, 2025 |publisher=Self Inc }}
See also
References
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