A bank fee or a bank charge includes charges and
fees
A fee is the price one pays as remuneration for rights or services. Fees usually allow for overhead (business), overhead, wages, costs, and Profit (accounting), markup. Traditionally, professionals in the United Kingdom (and previously the Repub ...
made by a
bank
A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...
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.
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
ATM usage fees are what many banks and interbank network
An interbank network, also known as an ATM consortium or ATM network, is a computer network that enables ATM cards issued by a financial institution that is a member of the network to ...
, 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. They also include
overdraft fees or
non-sufficient funds
A dishonoured cheque (US spelling: dishonored check) is a cheque that the bank on which it is drawn declines to pay ("honour"). There are a number of reasons why a bank might refuse to honour a cheque, with non-sufficient funds (NSF) being the mos ...
(NSF) fees for exceeding authorized overdraft limits, or making payments (or attempting to make payments) where no authorized overdraft exists.
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
A cheque (or check in American English) is a document that orders a bank, building society, or credit union, to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The person writing ...
. 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.
In general bank fees have been declining due to the digitalisation of banking and economies of scale. However new transaction fees have been introduced as new payment methods have been developed such as
credit card fees and
interchange fee
An interchange fee is a fee paid between banks for the acceptance of card-based transactions. Usually for sales/services transactions it is a fee that a merchant's bank (the "acquiring bank") pays a customer's bank (the " issuing bank").
In a ...
s.
See also
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Credit card fee
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Interchange fee
An interchange fee is a fee paid between banks for the acceptance of card-based transactions. Usually for sales/services transactions it is a fee that a merchant's bank (the "acquiring bank") pays a customer's bank (the " issuing bank").
In a ...
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Origination fee
An origination fee or establishment fee is a payment charged for establishing a loan account with a bank, broker, or other financial service provider.
While origination fees can be a set amount, a tiered amount, or a percentage. Percentages typic ...
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Overdraft
An overdraft occurs when something is withdrawn in excess of what is in a current account. For financial systems, this can be funds in a bank account. In these situations the account is said to be "overdrawn". In the economic system, if there i ...
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Overdraft fee
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Unavailable funds fee
An unavailable funds fee is a penal fee applied by a bank to a client's transaction account when a transaction is posted to the said account that has a ''negative available balance'', regardless of if the account factually contains a ''positive p ...
References
{{DEFAULTSORT:Bank Charge
Banking in the United Kingdom
Banking terms
Fees