Bank Charges & Fees

Since banks operate as commercial enterprises, it is necessary for them to charge their customers in order to provide the services they offer. Compared to the interest that your deposits earn, which is variable, the fees charged by banks for their services is normally a fixed amount.

Each bank charges its own range of fees, varying between banks in the same way as the selection of services they offer. A particular bank may charge for overdrafts while another may not, or the overdraft fees may only apply to certain clients, depending on the type of account they have.

Often, the type of account you have will determine which fees may apply to your transactions.

The following are examples of the most common charges and fees levied by banks to their clients:

Transaction Fees
Banks charge a fixed amount for certain transactions. Some banks may even charge for over-the-counter transactions in order to encourage the use of online services, as this lessens the long queues of customers that can sometimes form at their branches on especially busy days.

Cheque Charges
A fixed amount is usually charged for each cheque written to account for processing and handling fees. Normally this is a low fixed fee of a few pence rather than a percentage of the amount stated on the cheque.

Overdraft Fees
A fee may be applied to overdrafts that you may have in your current account. Depending on the bank, these charges may be fixed arrangement fees or a percentage of the amount of the overdraft.

Account Fees
There is a basic fee normally charged for the operation of your business account. This amount varies depending on the bank. Some banks do not charge account fees but will usually have overall higher service charges.

Overdrawn Fees
In cases where your account is overdrawn (i.e. exceeds the agreed overdraft limit), your bank will usually apply a fixed fee.

Late Fees
Late debt payments are usually charged a late fee. A common example would be late payments of credit card bills that are overdue. Loan and mortgage repayments are also typically subject to late fees.

Credit Card Charges
Purchases made through your business credit card are treated as an immediate loan provided by the bank to your company. As such, the total amount put on the credit card is charged interest. Additional fees may also apply depending on other features or services associated with the credit card (i.e. purchase insurance).

Electronic Funds Transfer Charges
The electronic transfer or payment of funds may be charged by your bank either directly or on an intermediary’s behalf. For instance, there may be a fixed fee for making an electronic transfer to an overseas account or payments through BACS may be have extra charges.

Third Party Charges
Certain bank transactions that require the service of an external company will be charged to the client involved in the transaction. Examples of these transactions are overseas remittals, foreign currency payments and inter-bank transfers. In case you avail of these type of services, check to see if the charges are reflected on your statements and identified as such.

Other Charges
Specific fees may be charged for other services not described here. The amount will depend on the particular service being charged for, and will normally vary between banks. Before availing of a new service of your business account for the first time, always make sure you are aware of any possible fees that may come with it.