If the fees charged on demand deposit accounts do not cover the cost of providing demand deposit services, the bank receives a subsidy or implicit interest payment.

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Banks do not receive a subsidy or implicit interest payment if the fees charged on demand deposit accounts do not cover the cost of providing those services; instead, they incur a loss or have to cover the costs through other means, such as using profits from other areas of their business.

If the Fees Charged on Demand Deposit Accounts Do Not