We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Non-Interest Income?

Malcolm Tatum
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Non-interest income is any type of income that is generated from the application of fees, rather than from interest that is applied to the outstanding balance of a financial account. Income of this type is often associated with financial institutions, particularly banks and credit card companies. In some cases, the non-interest income is associated with recurring fees that are assessed on customer accounts each month. At other times, the fees are one-time charges that are applied in return for some type of specific task or service that is provided by the account issuer.

With banks and similar institutions, a major source of non-interest income is the fees associated with the management of customer accounts. For example, a checking account may be structured to allow a small fee to be debited from the customer’s account on a monthly basis. Sometimes known as a service fee, the charge is in exchange for such tasks as posting debits and credits to the account, providing checks free of charge, and supplying the customer with a monthly statement of account.

There are several different types of recurring non-interest income that is generated by various types of financial accounts. With investment accounts, maintenance fees may be assessed on a semi-annual or annual basis, as long as the investment account remains open with a specific brokerage. Some institutions charge what is known as an inactivity fee; this fee is assessed when there has been no activity on an account for a predetermined period of time, and is charged periodically until some type of activity on the part of the account holder commences.

Other types of non-interest income involve the assessment of fees based on one-time incidents that require special attention by the bank. Insufficient funds charges are an example of this type of fee that generates income for the bank. When a customer does not have enough money in the account to cover a check written on that account, the bank will charge a one-time fee in exchange for managing the transaction.

That management provided in exchange for charging a non-sufficient funds fee may take the form of honoring the check and deducting the amount from the account balance, creating a negative balance. Depending on bank policies, the check may be returned to the presenting bank, and the fee is debited from the account balance. In either situation, the bank has generated a small amount of non-interest income.

Credit card companies also earn non-interest income. Some plans call for assessing a fixed monthly service fee that is charged whether the account holder uses the account or not. Other credit card plans allow for an annual service fee that is paid as a lump sum during a specified month each calendar year. There are also a few credit card providers who assess a fee each time the account holder renders a payment on the account balance via an online transaction, thus generating a source of income that is not connected with any type of application of interest to the outstanding balance.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum , Writer
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Discussion Comments

By Terrificli — On Mar 31, 2014

@Logicfest -- that is a great service to be sure, but haven't we all seen an increase in the number of services offered by banks that generate non-interest income? For example, finding totally free checking anymore is difficult as a lot of banks now charge a fee for that.

Banks should not be criticized too much for this -- the economy is still more than a bit of a mess and every business out there is looking for ways to make ends meet. Adding fees is often a quick way for a bank to generate the revenue it needs to stay in business.

By Logicfest — On Mar 30, 2014

There are banks out there that count on non-interest income a great deal. For example, overdraft protection generates a lot of non-interest income for banks. That benefits customers because it keeps them from writing hot checks, but banks don't offer that service for free -- there is a fee attached when a customer uses overdraft protection and banks have generated millions of dollars in fees by offering that service.

Malcolm Tatum

Malcolm Tatum


Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Read more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.