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Non Interest Income Essay

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From the above, we have understand that non interest income is one of the type of bank income that charge by the bank through the penalty to customers or charge by giving the some services to their customers. One of the most common type of the non interest income for the bank is the service fees income. What is a service fees? A service fee is the fee that have been charged by the bank through the bank help their customer to manage their bank account. When the customers make the transactions to deposit or make payment by their account, the bank will help them to debit or credit their account. Besides, the bank will send the statement of your account to the customers monthly which allow their customers can up to date with their account balance …show more content…

The companies record this separately as an interest income due to the interest cannot count as the original investments. One of the type of the interest income is loan. There are also many type of loan that can be earn by the bank. The one that I have been choose is commercial loan. Commercial loan is the simple loan that earn by the bank and it is debt based funding arrangement that a business can set up with a financial institution. Some of the small business may face the problem of no enough cash or lack of cash on hand to access the debt and equity market for the financing purpose. Therefore, they need to rely on financial institution to settle the problem. Normally the bank will use the sources of money to earn their interest income. For example, customer A has a surplus of cash of RM 10000 and he want to deposit it into his account. The bank would not only just keep the cash and they will loan it to the customer B who has some financial problem and needed the loan from the bank. For customer A, the bank may give him an interest of 3% to add in their deposit account. But for customer B, the bank may charge him for around 6% interest when he want to pay to the bank. Therefore, the bank will earn an commercial income of about 3% by loan the deposit of customer A to the customer

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