When it comes to banks, there is also a tier where fees are waived for high value customers. For example, checking, atm, wires, are free if you have $50k or more in your checking account.
this is true. makes you question why they do it for them and not for everybody
You cannot collect literally billions of dollars in overdraft fees a year if you let everyone do it.
They want high tier customers and they don’t profit on low tier customers? Your bank can sell a lot of services to someone who has money to spare.
There is a certain amount of overhead in servicing an account whether it has $5 in it or $500,000 in it. A $5 account doesn't give the bank much to loan while a $500,000 gives the bank lots of money to loan out. So the bank would rather have 100 $500k accounts than 100 $5 accounts. The fees help make the bank willing to maintain the $5 accounts.