Banks also charge non-interest fees for their services. For example, if a depositor opens a bank account, the bank may charge monthly account fees for keeping the account open. Banks also charge fees for various other services and products that they provide. Some examples are:
- Credit card fees
- Checking accounts
- Savings accounts
- Mutual fund revenue
- Investment management fees
- Custodian fees
Since banks often provide wealth management services for their customers, they are able to profit off of the fees for services provided, as well as fees for certain investment products such as mutual funds. Banks may offer in-house mutual fund services to direct their customers’ investments towards.
Fee-based income sources are very attractive for banks since they are relatively stable over time and do not fluctuate. It is beneficial, especially during economic downturns, where interest rates may be artificially low and capital markets activity slows down.