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      08-05-2011, 12:27 PM   #1
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New Fee to Bank Cash

Things must be pretty bad, from almost no interest rates to now getting charged?

Bank of New York Mellon Corp. on Thursday took the extraordinary step of telling large clients it will charge them to hold cash.

Bank of New York Mellon is preparing to charge some large depositors to hold their cash, in the latest sign of the worries roiling global markets. Liz Rappaport has details.

The unusual move means some U.S. depositors will have to pay to keep big chunks of money in a bank, marking a stark new phase of the long-running global financial crisis.

The journey is the reward.
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      08-05-2011, 12:50 PM   #2
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The fastest-growing asset on bank balance sheets this year is cash. Since the beginning of the year, U.S. bank holdings of cash are up 83%, or $890 billion, to $1.98 trillion. Consumer loans, by contrast, have grown 0.2%, or $1.7 billion. Commercial and industrial loans are up 3.8%, or $46.1 billion.
Bank of New York said that customers that have deposited more than $50 million into their accounts since the end of July will face an annual fee of at least 0.13% of the excess deposits.
Holding cash comes at a cost to banks. Bank of New York and others pay fees of about 0.10% to the FDIC to insure their deposits, said people familiar with the matter.

Given the size of recent deposits and the flows in and out of money-market funds, the charges could run into the millions of dollars.

Huge deposit flows pose another problem for banks: They force banks to hold increasing amounts of capital, which they are loath to do because doing so depresses profits—which are already under pressure with a slow economy and rising regulatory demands.
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      08-05-2011, 02:34 PM   #3
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kinda makes sense on some level. having $50 million in a checking account....
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      08-05-2011, 04:25 PM   #4
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proper, charge-free banking

no interest on it tho, but I'll live
i love german cars
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      08-05-2011, 04:27 PM   #5
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Originally Posted by len56 View Post
proper, charge-free banking

no interest on it tho, but I'll live
brb getting plane ticket
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      08-08-2011, 11:51 AM   #6
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Last year when I was the treasurer for Little League, we got fees for depositing CASH. I'm not talking billions of dollar, this was maybe $400 for the weekend's snack bar recipts.
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