No-one likes getting slugged with a fee from their bank, but for our financial institutions they're a $12.7 billion business. An analysis of bank fees by the Reserve Bank suggests that businesses are getting slugged more than consumers, and that loans are now a bigger source of fee income than day-to-day accounts.
Picture by coyotejack
In 2009, banks claimed a whopping $12.7 billion in fee income. Fees for households went up by 3%, but where they came from underwent a definite shift:
This is the slowest rate of growth in household fees since the survey began in 1997, with strong growth in housing loan fee income partially offset by a decline in deposit account fees.
Fees for businesses grew rather faster, up 13%. The fees which tend to get our goats are so-called "exception fees", charged when an account is overdrawn. Those totalled $1.2 billion in 2009, which wasn't a major jump on the previous year.
Banks clearly aren't going to give up that income, so the best way to stay in front is to carefully check the conditions that apply to your accounts, and keep a close eye on them. While shifting financial institutions can be a major hassle (as many readers affirm), it can be worth it to avoid unwanted fee hassles.