The December rate hikes were good for custody banks but not so much for their customers.

For several years two of the biggest custody banks, Bank of New York Mellon and Northern Trust, had waived fees on money market funds because, otherwise, they would have been asking investors to pay the banks to hold their money.

But the banks have started putting an end to the freebies thanks to the Fed's yearend rate hike and subsequent increase in money market fund yields.

"Money market fund managers saw this as a way to get back on track and make money again," said Marty Mosby, an analyst at Vining Sparks.

Mitchell Harris, the chief executive of BNY Mellon's investment management group, said it was a broad trend.

"The [reductions] in money market fee waivers help all" of the custody banks, he said during an April 21 conference call.

BNY Mellon waived $32 million in fees in the first quarter, down 55% from a year earlier. Northern Trust curbed its lost fees by three-quarters to $7.7 million in the same period. State Street in Boston, the other big custody bank, does not have a large business in money market funds and does not break out figures on its fee waivers.

It is only going to get better for the trust banks provided the Fed eventually raises rates. Still, the rate of recovery will slow somewhat.

"The recovery is not necessarily linear," Todd Gibbons, BNY Mellon's chief financial officer, said during the conference call. "Therefore additional rate increases are not expected to be quite as impactful as the first."

When the Fed raised rates 25 basis points in December, BNY Mellon recovered half the revenue it was losing from fee waivers. That boosted fourth-quarter earnings per share by about 3.5 cents. An additional 25 basis-point rate hike would help BNY Mellon increase its recovery rate to 70%, while an additional 50 basis point rise would help BNY Mellon recoup all of them, according to an estimate by Barclays analyst Jason Goldberg.

The overall benefit could be significant at a time when all banks, especially trust banks, are struggling to find new sources of revenue and minimize the need for further cost cuts.

BNY Mellon's investment management group lost about $250 million in revenue in 2015 from fee waivers, and about $275 million in 2014. Another BNY Mellon unit, investment services, had to waive the same kind of fees, too, but the company does not break them out.

BNY Mellon's first-quarter profit rose 5% from a year earlier to $804 million on improved income from investments as a result of higher interest rates.

Northern Trust lost $109 million in waivers in 2015 and $130 million in 2014. Those totals include figures from both its wealth management group and its corporate and institutional services division.

Northern Trust reported first-quarter profit of $232 million, a 5% increase attributed primarily to growth in trust and investment services.

The good news for the banks is bad news for investors in money market funds. And the change comes as more individuals are putting their savings in mutual funds and exchange-traded funds that do not employ active managers, who command higher fees.

Ken Usdin, an analyst at Jefferies LLC, noted during an April 19 conference call that Northern Trust's wealth management group has grown more slowly than other divisions, such as corporate and investment services. Biff Bowman, chief financial officer at Northern Trust, responded that individual investors currently are extremely sensitive to fees.

"There's an ongoing and broad industry trend towards passive management as investors continue to face lower overall returns," Bowman said during the conference call. "And they look to control what they can control, which is namely fees."

Even so, the trust banks moved as fast as they could to start charging fees again on money market funds.

BNY Mellon and Northern Trust had been expected to recover the lost revenue more slowly, Mosby said. Executives at both banks had said it would take several Fed rate hikes for money market funds' yields to rise an adequate amount. But the banks recovered a much greater share of the lost fees during the first quarter.

"They were incentivized to make it up as soon as possible," Mosby said.

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