What is the commitment fee that ABSA levies on our accounts?

[blunomore]

As per the thread title.

 

[Equiry]

If you have an overdraft facility and do not use it, ABSA charge a COMMITMENT fee to compensate for the interest they do not get. For a full explanation visit "www.investopedia.com/terms/c/commitmentfee.asp"

 

[Kosmik]

Never experienced this. Business account?

 

[Jehosefat]

If you have an overdraft facility and do not use it, ABSA charge a COMMITMENT fee to compensate for the interest they do not get. For a full explanation visit "www.investopedia.com/terms/c/commitmentfee.asp"

Not entirely correct, it's mostly to account for the fact that the bank has to hold capital against undrawn commitments and holding that capital has a cost.