The North Carolina-based bank, which has a strong presence in the Chicago area, is bumping its overdraft fee to $39, up $4, on June 5. The new charge is among the highest in the nation.
In addition, the bank is increasing the number of times in a day it can hit customers with that $39-overdraft fee. Bank of America customers will be charged that fee for the first 10 times they overdraw their account in a single day. The previous limit was seven times a day. That means a customer could be hit with a total of $390 in fees if the overdraw their account 10 times in a day.
Another new fee – a $35 one-time charge – is assessed if the customer’s account has insufficient funds for five days.
“Overdraft fees are designed to modify customer behaviors and offset the risks that an overdrawn account poses to bank, so given the changing economic conditions, those risks have increased,” a Bank of America spokesman said.
Bank of America’s overdraft fees are well above the national average of $28.95, according to the latest data from bankrate.com, a Florida firm that aggregates financial rate information. Average overdraft fees increased 2.5% last year, up from $28.23 in 2007.
Citibank charges $34 for each overdraft, with a limit of four fees per day. JPMorgan Chase uses a tiered system to assess overdraft fees. The first occurrence in a year triggers a $25 fee, the second through fourth instances cost $32 each, and the bank charges $35 for each overdraft item thereafter, with a limit of six per day.
Both Citibank and JPMorgan Chase said they have no plans to increase or decrease their overdraft fee structures.
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