Citi has announced that they are getting rid of overdraft fees. They are the largest bank to do away with the charges.
The bank has reported that by this summer, overdraft fees, insufficient funds fees, and overdraft protection fees will be no more.
Citi says their goal is to raise financial inclusion in low socio-economic communities.
The normal overdraft fee is $34. It is incurred when a person doesn’t have enough money in their account to pay for a transaction.
Citi is one of five big banks that have cut these fees. But, after lawmakers’ oppostion and competition from other banks, more lenders are following the trend.
Experts say that eliminating these fees will keep customers in the banking system. It will also prevent customers from being charged when they are dealing with financial issues already.
Overdraft protection that allows for transfers from a connected savings account and an automatic line of credit will still be options. However, there will not be a cost.
From January to September of last year, Citi made $70 million off of overdraft and insufficient funds fees. But, it was recognized, that is not where they get alot of their money from, unlike some other large financial institutions.
