Bank of New York Mellon Corp. said Thursday that it will charge its customers a fee to hold cash deposits over $50 million.
The bank said it has seen such a large increase in deposits over the last month that it will charge a 0.13 percent fee to clients with "extraordinary high deposit levels."
Bank of New York Mellon, which has $23.6 trillion in client assets under its custody, said customers have moved money to cash as a safe haven in the past month as investments like stocks and bonds have become increasingly volatile.
The bank's customers are mainly large pension funds and money market funds. The bank collects dividends on stocks and holds cash deposits, among other things, on behalf of such large investment funds.
The 0.13 percent fee for keeping cash at Bank of New York Mellon is higher than what investors could earn on a one-year Treasury bill, a slightly riskier investment that is yielding 0.11 percent Thursday.
So far, the bank's chief rivals, State Street Corp. and Northern Trust Corp., say they have not instituted the same kind of fee.
Bank of New York Mellon said that "once the markets stabilize, we expect deposit levels will trend lower At that time, it is likely this fee will no longer be necessary."