A protective tariff is a tax on imported goods to protect domestic merchandise. It is controversial, with some arguing it is unethical and a threat to free trade, while others say it keeps money within the national economy and prevents unfair competition for domestic companies. A protective tariff is a financial decision by a government […]
Severance fees are taxes on the removal of natural resources, not based on profit but on the total amount extracted. They vary by region and can be an important source of revenue for governments. Critics argue they can increase business costs, but studies show they do not deter production. Regions without severance taxes can lose […]
Surrender fees are charged when canceling or cashing out an annuity early. They compensate the administrator for managing the annuity, and are outlined in the contract. Annuities are designed for long-term investment and can have tax penalties if cashed early. It’s best to consult an accountant or financial advisor before purchasing an annuity. A surrender […]
A 12B-1 fee is a marketing fee charged by a mutual fund to pay for annual expenses. It is considered an operating expense and cannot be more than 1% of a fund’s net assets. Most mutual funds also have sales charges, which are not part of operating expenses. Some funds use assets to pay distribution […]
An incidental fee is a charge that organizations use to finance certain services or as an automatic payment, such as those collected by schools or hotels. Schools use the fee to fund projects, while hotels use it as a hold on funds for security. Airlines and banks also charge incidental fees. An incidental fee is […]
Subscription rights allow current investors to maintain their percentage ownership in a company by purchasing new equity issues before they are offered on the open market. This can be done at market price or below market price, and shareholders must exercise the right within a certain period of time. The company benefits from generating immediate […]
Banks charge wire transfer fees for sending and receiving money electronically, with international transfers being more expensive. It’s important to find a bank with reasonable rates, and recipients may charge a convenience fee to cover their own fees. A wire transfer fee is a fee that is assessed by a bank or credit union for […]
A fee structure is a list of fees associated with products and services offered by a company, which must be disclosed to customers upon request or as a convenience. Financial institutions must disclose fees for services such as account maintenance, trades, and document reproduction. Companies can update their rates, but must provide legal warning and […]
The bank rate, set by central banks, impacts the amount of money available in a nation and can control inflation and exchange rates. Consumers should pay attention to it as it can affect interest rates on loans and lines of credit. The bank rate is the interest rate used when a central bank like the […]
Crossover rates determine when two similar projects reach the same net present value, helping investors decide what to buy and sell. The rate is an indicator of relative performance, but different levels of risk and movement mean investors must decide whether to hold both securities or sell one. The rate can be calculated at any […]
Early withdrawal penalties are fees charged by financial institutions or the government when an investor withdraws money from long-term investment plans before they expire. Tax-deferred retirement plans and certificates of deposit (CDs) are subject to these fees, with exceptions for death or medical expenses. CD withdrawal penalties vary by bank and can include invading the […]
An assignment fee is the cost of using an inverter for an inversion, but it’s important to deduct initial charges and other costs to determine the true fee. Reversers aim to keep the fee low by working with traders who offer the most profitable rates and choosing mutual funds with lower initial charges. An assignment […]
To pay for medical school, only borrow the necessary amount and avoid private loans. Consolidate federal loans with low interest rates and consider payment programs based on income. Opt for federal loans over private loans and consolidate loans when interest rates are low. Look for payment programs based on income and apply when income is […]
A levy tax is a state or provincial tax on a deceased taxpayer’s estate, used when there is no local estate or death tax. It simplifies the process but may result in no tax payments if the IRS determines no property taxes are owed. Some US jurisdictions choose to assess estate or death taxes instead. […]
Freight charge covers expenses related to storing and caring for physical goods, including physical storage, insurance, and interest rate futures. It also includes ancillary charges. Grain preservation is an example. Investors cover the costs, and any other cost related to proper maintenance is a cargo charge. If the commodity doesn’t generate enough revenue to cover […]
