Why do banks charge fees when they're already using our money?

Banks earn money from deposits, but a deposit isn’t profit in full. Banks must keep enough cash and liquid assets available for withdrawals, meet regulatory requirements, and manage the risk that loans won’t be repaid. They may also pay interest on some accounts and incur costs for branches, staff, fraud prevention, technology, and payment processing.

Fees cover particular services or help fund the overall account. For example, ATM fees may reflect charges from another ATM’s operator, while transfer fees can cover processing or expedited service. Monthly maintenance fees may apply when an account doesn’t meet conditions such as a minimum balance or regular direct deposit.

Banks also earn revenue in other ways, including interest on loans and fees from services. The balance between those sources varies by bank and account. If fees are a concern, compare account terms: some banks and credit unions offer no-monthly-fee accounts, reimburse certain ATM fees, or waive charges if you meet specific requirements.