How Much Do Banks Earn on Overdraft Fees?

by
Adam Rust

Do overdraft fees have you singing the bank account blues?

You are not alone. Banks collect billions every year in overdraft fees.

This entry will tell you how much each of the largest banks earned in overdraft fees during the first three quarters of 2018.

To add context to those figures, I have included the overdraft fee of each bank and the maximum number of fees that you can be charged per day.

Some banks will not charge an overdraft fee if you are only over by a few dollars.

In the first three quarters of 2018, overdraft fees made up 35 percent of all checking account fees. Overdraft fees exceed maintenance fees threefold; for ATM fees, it is six-fold.

Although many would think otherwise, banks do not earn much on the float. “Float” is a term to describe the interest earned during the period that a payment has been debited from the payer’s account but not yet credited to the recipient. Yes, it does seem to take a long time for funds to transfer, but that is a product of our old electronic funds transfer systems. Banks don’t earn much holding a fifty dollar check for three days to earn interest of 1/100th of a percent, and, for most banks, the process of paying a transaction is a cost. Banks collect funds when you use your credit or debit card, but they pay to route funds through ACH, by wire, or via bill pay.

Note: Did I mention that WiseWage accounts NEVER have overdraft fees?

I pulled data from the Federal Financial Institutions Examination Council https://cdr.ffiec.gov/Public/PWS/DownloadBulkData.aspx to answer the question “how much do banks earn on overdraft fees?”

This data covers the first three quarters from 2018. While some banks have reported their earnings for all four quarters, not every bank has, and thus it is better in my mind to limit the amounts on nine months.

Picture of card
Picture of card
Picture of card

I pulled data from the Federal Financial Institutions Examination Council to answer the question “how much do banks earn on overdraft fees?”

This data covers the first three quarters from 2018. While some banks have reported their earnings for all four quarters, not every bank has, and thus it is better in my mind to limit the amounts on nine months.

Revenues by bank, in descending order (highest revenues first).

1. JPMorgan Chase: $1.434 billion. $34 per overdraft (up to 3 per day) https://www.chase.com/content/dam/chasecom/en/legacy/ccpmweb/shared/document/chase_consumer_A9_english_web.pdf

2. Bank of America: $1.147 billion. $35 per overdraft, up to 4 per day.

3. Wells Fargo Bank: $1.138 billion. $35 per overdraft, up to 3 per day for consumer accounts and 8 per day for business accounts.

4. TD Bank: $408.6 million. $35 per overdraft, up to 5 per day.

5. US Bank: $352.6 million. $36 per overdraft, up to 4 per day.

6. PNC Bank: $292.4 million $36 per overdraft, up to 4 per day.

7. Regions Bank: $267.8 million. $36 per overdraft, up to 6 per day.

8. Branch Bank & Trust (BB&T): $216 million. $36 per overdraft, up to 6 per day.

9. SunTrust Bank: $213.0 million. $36 per overdraft, up to 6 per day.

10. USAA Federal Savings Bank: $126.7 million. $25 per overdraft, up to 2 per day.

11. Capital One: $123.1 million. $35 per overdraft, up to 4 per day.

12. WoodForest National Bank: $122.7 million. $29 per overdraft, up to 3 per day.

13. Citizens Bank: $116.3 million $35 per overdraft

14. KeyBank: $105.8 million. $36 per overdraft, up to 5 per day.

15. Fifth Third Bank: $104.3 million $37 per overdraft, up to 5 per day.

16. Huntington National Bank: $102.0 million $37.50 per overdraft, up to 4 per day

17. M&T Bank: $90.8 million. $38.50 per overdraft, up to 5 per day.

18. Compass Bank: $87.4 million $38 per overdraft.

19. First Convenience Bank: $79.3 million $34 per overdraft, up to 3 per day.

20. Citibank: $77.0 million $34 per overdraft, up to 4 per day.

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