1/2
Swipe or click to see more
2/2
Swipe or click to see more
Select an option below to continue reading this premium story.
Already a Honolulu Star-Advertiser subscriber? Log in now to continue reading.
Banks’ overdraft fees range from $5 to $45, survey finds
Overdraft fees charged by banks have come under scrutiny by federal regulators in recent years, but charges vary widely. The range of prices banks and credit unions charge customers who withdraw more money than they have in their accounts is $45 on the high end and $5 on the low end, according to a recent study of more than 2,800 institutions. An overdraft occurs when the bank chooses to cover such transactions. The lowest was charged by an Iowa bank and the highest by a Florida credit union, according to Lake Forest, Ill.-based Moebs Services. The median overdraft fee in the survey was $30.
Banks charge for overdrafts in two ways. "Penalty pricing" is when a bank doesn’t want consumers to overdraw their accounts, so they charge a high price to discourage the behavior. "Safety net pricing" is when the price is set low to help consumers with money struggles or who do a poor job tracking finances.