How is a daylight overdraft fee calculated?
The Federal Reserve charges institutions fees for daylight overdrafts incurred in their Federal Reserve accounts. For each two-week reserve maintenance period, the Reserve Banks calculate and assess daylight overdraft fees, which are equal to the sum of any daily overdraft fees during the reserve maintenance period. For each day, an institution’s daylight overdraft fee is the effective daily rate charged for daylight overdrafts multiplied by the average daylight overdraft for the day minus a deductible (a free amount of daylight credit). For certain institutions that do not have regular discount window access and should not incur daylight overdrafts, the Reserve Bank charges a penalty fee on average daily overdrafts. For details on the daylight overdraft fee calculations please refer to the Guide to the Federal Reserve’s Payment System Risk Policy on Daylight Credit [PDF; 692K].
