Facing potential losses if the Fed cuts interest rates, America’s biggest banks have floated a potential new source of income: charging you for depositing your money with them. The warning by banks, the Financial Times reports, highlights the dangers the Fed faces if it cuts the interest it pays on bank reserves “to offset an eventual ‘tapering’ of the $85bn a month in asset purchases that have fuelled global financial markets for the last year.”
Charging individuals and companies to deposit their cash would be a “highly unusual” move, says the FT. It seems like another sucker punch from the banking industry—inventors of the $3 “other” ATM surcharge—that have long been pioneers in sneaky nickel and diming of customers. But, Bloomberg points out taking deposits isn’t an expense-less enterprise for banks.
Offering deposits isn't costless for banks, which have administrative expenses and run much of the infrastructure behind the payments system. Banks also have to pay fees to the Federal Deposit Insurance Corp. commensurate to the value of the deposits they borrow from savers.