Fixed Charge Coverage Ratio Analysis
5 C’s of Credit (5 C’s of Banking)
Categories of Banks
Bank Charge Definition
Bank charge, defined as the fees associated maintaining a bank account, exist in the personal as well as business world. These charges come from two factors. First, regular account maintenance is perhaps the most common. Additionally, fees due to violations of agreements, bank charges for insufficient funds as an example, also occur.
Bank Charge Explanation
Bank charge, explained as the common fees from banking, form the most common costs of maintaining accounts. For normal accounts, banks may charge fees such as monthly or yearly account maintenance fees, transaction fees, transfer fees, and more. For violations, bank charges for businesses may be caused by undergoing the minimum balance, insufficient funds, minimum savings amounts, and more.
The reason bank charges exist is so that banks can maintain reliable customers. These fees are levied to discourage bad policies which, if compounded, result in issues with the bank itself. Bank charge refunds may be given but are uncommon due to corporate policies.
Bank charges can be the result of other situations with a bank. It is important to understand the agreement made with a bank upon creation of a business or personal account. Additionally, account holders will want to educate themselves on bank policies regularly to be abreast of new policies, changes, and other amendments.
Bank Charge Example
Jonah is the manager of a branch of a major bank. As the manager, he has a variety of responsibilities from managing employees, monitoring performance, creating and maintaining branch policies, upholding corporate policies for both workers and account holders, and processing major transactions. Jonah has much to do when he shows up to work each day.
Jonah must now decide on how to uphold policies with an important business account holder. In this situation, the account owner was charged for insufficient funds. The problem with this is that the company deposited a check to cover this, however the check came at the end of the work week. The bank does now process checks on the weekend. Though a bank charges complaint letter has been sent to the corporate office Jonah must make the final decision.
Jonah meets with the company account manager. This man, one of the controllers of company finances, makes multiple cases to attempt to gain the funds lost from this accident. Despite this, Jonah can not give the company a break. Corporate policies dictate that Jonah must maintain his stance.
Jonah is able to compromise by waving the monthly account fees. This is able to soften the blow of the mistake. Jonah wants to make sure to keep happy customers and maintain good word-of-mouth. Overall, he is successful at this. Jonah leaves work happy that he was able to provide some value to his customers.