Difference between fund based and fee based financial services
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Difference between fee base vs fund based services
Answered by admin @
A fund based financial service involves credit offered by banks in the form of loans, overdrafts and other cash transactions. In a non-fund based financial service the bank does not deal with funds or cash transactions. Some examples of this type of service are bonds, letters of guarantee and letters of credit.
A bank or NBFC offers two types of products: fee-based and fund-based. ... — Loans are fund-based products. To make a loan, a bank or NBFC has to borrow money and ensure that the cost of borrowing is less than the cost of lending. When it sells a mutual fund or insurance product, it earns a fee or commission for doing so.
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