DEFINITION of 'Impose'

The term impose refers to the act of placing a fee, levy, tax or charge on an asset or transaction to the detriment of the investor. The imposition of fees is a common practice in most investment products and services, and may be used as a deterrent to selling or exiting a financial position early.


Fees are inevitable, regardless of whether you are a small retail investor or a multinational investment bank. Just about every financial service involves a payment to the party that helps to facilitate the transaction. Most fees should be made known to investors before they purchase a new security or move funds in a way that will incur a charge of some kind. Many fees are imposed not at the time of transaction, but instead levied on an annual basis as a percentage of assets or holdings.

Banking Fees

Since the 2008 financial crisis, more and more banks are imposing fees on customer accounts and transactions. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 has implemented a number of new regulations and rules for the finance industry, which translates to more fees for banking customers. The Durbin Amendment to the Dodd-Frank Act has placed a cap on the fees banks may charge to merchants for processing debit card purchases, which can mean even higher fees for account holders. Furthermore, according to the Federal Reserve, banks can only charge customers overdraft fees on debit card transactions if the customer opts in.

Banks also impose fees at ATMs, because ATM fees make these off-premises banking options more profitable. Often, the bank that owns the ATM imposes a fee, and the bank that issued the customer’s debit card, if it is a different bank, imposes its own fee. This can lead to total ATM fees of $11 or more in some locations.

Other types of fees banks might impose include:

  • Foreign transaction fees
  • Minimum balance fees
  • Returned deposit fees
  • Overdraft fees
  • Annual or monthly maintenance fees
  • Early account closure fees
  • Paper statement fees
  • Lost debit card fees
  • Returned mail fees
  • Fees for redeeming rewards points
  • Fees for using a human teller

Large banks charge the most fees, because larger banks – those with assets of $50 billion or more – are less efficient than smaller banks, and must pay more to maintain common demand deposit accounts. Increasingly, banking customers are choosing to avoid the imposition of most fees by banking with smaller, community banks or credit unions.

  1. Brokerage Fee

    A brokerage fee is fee charged by a broker to execute transactions ...
  2. Performance Fee

    A performance fee is a payment made to an investment manager ...
  3. Taxes

    An involuntary fee levied on corporations or individuals that ...
  4. Redemption Fee

    A redemption fee is a fee charged to an investor when shares ...
  5. SEC Fee

    A nominal fee that was created by the Securities Exchange Act ...
  6. Per Transaction Fees

    A per transaction fee is an expense a business must pay each ...
Related Articles
  1. Investing

    8 Investing Fees That You Should Never Pay

    In investment management and financial planning there are a plethora of fees that are unnecessary.
  2. Personal Finance

    Do You Know How Your Financial Advisor Is Paid?

    It is important to understand how your financial planner is compensated.
  3. Investing

    A Guide to Investor Fees

    Fees are one of the most important determinants of investment performance and something every investor should be aware of.
  4. Investing

    Are Fees Depleting Your Retirement Savings?  

    Each retirement account will have a fee associated with it. The key is to lower these fees as much as possible to maximize your return.
  5. Investing

    3 Investment Fees That Are Negotiable

    Investment fees are a necessary evil but that doesn't mean they have to be overly costly. There are ways to negotiate some of the expenses down.
  6. Personal Finance

    The Ins And Outs Of Bank Fees

    These service charges could nickel and dime you right out of your nest egg.
  7. Tech

    How Much Cheaper are Bitcoin Fees than Credit Card Fees?

    Bitcoin transaction fees are starting to rise as the network gets backlogged due to more usage, but are still much lower than typical credit card fees.
  8. Investing

    Investors: Your Fees Are Probably Too High

    The lower your fees, the higher your returns. Here's how to find out if you're paying too much for your investments.
  9. Financial Advisor

    How Mutual Fund Companies Make Money

    Read about the many different kinds of fees and sales charges mutual fund companies can use to generate revenue from those who invest in their shares.
  1. What kinds of fees are involved in futures trading?

    Learn what the various costs are that are charged by brokerage firms and trading exchanges to individual futures trading ... Read Answer >>
  2. Where do I look for fees that I am charged on investments? What are those fees called?

    The fees and expenses charged for investments vary. The fees usually depend on the type of investment and the investment ... Read Answer >>
Trading Center