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.
TODAY IN SLATE
Meet the New Bosses
How the Republicans would run the Senate.
The Government Is Giving Millions of Dollars in Electric-Car Subsidies to the Wrong Drivers
Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.
Cheez-Its. Ritz. Triscuits.
Why all cracker names sound alike.
Friends Was the Last Purely Pleasurable Sitcom
This Whimsical Driverless Car Imagines Transportation in 2059
- Protesters Take to the Streets to Sound Alarm on Climate Change in New York, Across the World
- Knife-Carrying White House Jumper is Vet who Feared “Atmosphere Was Collapsing”
- North Korea: American Sentenced to Hard Labor Wanted to Become “Second Snowden”
- Almost One in Four Americans Support Idea of Splitting From the Union
Did America Get Fat by Drinking Diet Soda?
A high-profile study points the finger at artificial sweeteners.