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Comment by trzeci | Hacker News Reader

Making sure that discussion will not heat without checking the content:

> PayPal is to introduce a £9 “inactivity” fee for anyone whose account has been dormant for at least a year, but still has some money left in it.

So it applies to money that's left on account. Once the balance is 0, there is not extra cost.

It's not that I'm happy in particular, as I have account there also, and I had to transfer remaining money. I believe there is more cases like mine, that has PayPay to pay on some portals that accepts only that payment method, and we're not willing to share credit card information.

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Nice, a bailin.

But sure, most banks have fees like that, and typically don't for a few years just to attract the broke people that were looking for an account with no fees. Then they turn them on.

In Britain (and the article is in a British paper), most banks don't charge fees for normal, consumer bank accounts.

They make the money in other ways, which is a different discussion, but it does mean people aren't used to paying for a bank account.

> But sure, most banks have fees like that

A bank account with fees? I've never seen that. They make money by loaning out your money, so they don't need to charge a fee.

It used to be that all basic (low end) US checking accounts had fees and the concept of no-fees being the norm has happened during my adult lifetime. Low end accounts (no money in them, basic tier) may not cover the yearly expenses for the bank to keep up with the legal paperwork on that account, but a high end account ($$$) has always had no-fees because of exactly what you describe. (digital life has I'm sure reduced said costs)

I work in an unrelated industry where the economics are the same - low spend accounts require more hand-holding (support time = money, etc.) and can be "upside down" (no profit, lossy), whereas large enterprise accounts generate money by their sheer hands-off approach done at scale.

> yearly expenses for the bank to keep up with the legal paperwork on that account

Wouldn't the yearly expenses to keep up any individual account be such a small fraction of a single cent, that we might as well call it zero?

Account information is literally just a few strings of bytes, and transaction info is similar. Even with a lot of transactions it'd likely be less than (say) 10kB per year?

Note: I'm on the board of a credit union.

There is no "legal paperwork" for accounts. The only real costs for managing accounts comes from mailing monthly statements. The last time we discussed these statements at a meeting, it was reported they cost about $1.00 (on average) to send.

> There is no "legal paperwork" for accounts.

...so I can just throw away all the tax documentation for my mid/high tier interest bearing checking and savings accounts at both my credit union and bank? that share certificate I have at my credit union generating dividends? "Legal" to me means "things I have to do or the police come find me." Your interpretation might be different, but my accounts have legal paperwork.

Good point. 1099s must be submitted to the IRS; however, that is done electronically. The cost, shared by all accounts, is negligible.

Is that "legal paperwork" something which you (the end user) has to do, and not something that the credit union/bank does?

Both. Financial institutions (broadening this to cover brokerages as well) produce federally required documentation (it may be digital in 2020, automated) for tax purposes; the most common in my travels is a 1099-DIV (dividend payments) but there are many kinds for all sorts of financial things a bank could/can handle related to investment income.

Both parties submit paperwork to the IRS - the institution tracks the assets they're holding/managing and reports it to the IRS on their side; they issue you appropriate documents and you do your taxes and report it using whatever appropriate form. The paperwork is of course dependent on the situation, for the average checking/savings accounts I will guess it's the 1099-DIV as most common - simple interest payments.

I got that slightly wrong, it's 1099-INT for interest in income on checking/savings, 1099-DIV is for dividends only.

Do you literally still mail paper statements? Why?

Yes, paper statements must be offered due to federal law. Not everyone has a computer. Like many institutions, we make e-statements an opt-out option for new accounts; however, we still have older accounts that continue to receive paper statements.

Welcome to a low interest rate world. Things are even worse at Japanese banks.

I used to get bonuses for these monthly fees, from loans, cc use and balance. Now even they are going away. Then again it does make sense when I look at the actual interest payment on my checking account.

There’s also “low balance” fees. You have less than $300 (or whatever) in your account? That’s $5/month.

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