Bank charge

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.

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