What is Non-Interest Income?

In banking, non-interest income is revenue derived mostly from fees and other activities outside the core activity of lending.

How Does Non-Interest Income Work?

For example, let's say Bank XYZ charges customers $25 for bounced checks, $4 to use an out-of-network ATM, and $3 for a paper statement. These fees are considered non-interest income.

There are literally dozens of different kinds of non-interest income. Here's a list of some of the more common types...

-- late fees
-- monthly account service charges
-- annual fees
-- service fees
-- inactivity fees
-- insufficient funds (NSF) fees
-- overdraft fees
-- over-the-limit fees
-- check fees
-- deposit slip fees
-- loan origination fees
-- loan servicing fees
-- gains and losses from the sale of loans and securities

Some banks and other financial institutions also generate significant revenues from the sale of insurance products, financial planning services, annuities and brokerage services, among other things. If a financial institution's primary source of income comes from charging its customers interest on loans, then any other fees or services it provides will typically fall into the category of non-interest income. You'll often find these items listed as non-interest revenue on the company's income statement.

Why Does Non-Interest Income Matter?

There are many forms of non-interest income, and they constitute a major component of revenue for banks, credit card companies, and many other financial institutions in the United States.

Ask an Expert about Non-Interest Income

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Non-Interest Income.

Be the first to ask a question

If you have a question about Non-Interest Income, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

Verified Content You Can Trust
verified   Certified Expertsverified   5,000+ Research Pagesverified   5+ Million Users