Banks look to charge for holding customers’ money

Banks look to charge for holding customers’ money, if Fed counters ‘lazy’ behavior
November 25, 2013, 5:12 PM


Bank customers could look forward to being charged to keep their money in U.S. banks.

That’s the latest threat coming out of Wall Street, according to a report in the Financial Times, as financial institutions look to combat a possible interest rate cut from the Federal Reserve on its bank reserves.

This latest potential step would be a hit to depositors, already earning close to zero interest on checking and savings accounts.

But the banks say it’s a side effect of the Fed’s quantitative-easing strategy and its eventual tapering of its asset purchases of $85 billion a month, which has created high liquidity within banks. The report cited executives at two of the top five U.S. banks, who said a cut in the 0.25 percent rate of interest on the $2.4 trillion in reserves they hold at the Fed would lead them to pass on the cost to depositors