A bank charge is a fee assessed to an account by a financial institution. A bank charge may be levied for a number of reasons, including the following:
- Not maintaining a minimum balance
- Issuing a not sufficient funds check
- Depositing a check that bounces
- Exceeding the overdraft limit on an account
- The passage of time, if there is a monthly service fee
- The ordering of additional bank checks
- Foreign transaction fees
- The issuance of a paper bank statement, rather than an on-line one
- The manual handling of transactions by a bank teller
- Inactivity in an account
Bank charges can be a major source of income for a financial institution.
A business that incurs bank charges will usually record them as expenses as part of its monthly bank reconciliation process.