Annual Fee

Business, Legal & Accounting Glossary

Definition: Annual Fee


Annual Fee

Quick Summary of Annual Fee


A fee charged once per year by financial institutions on certain type of accounts, usually in order to offset operating expenses. Charges for maintaining investment accounts may include annual fees to allow the institution to cover expenses even if very few commission-generating activities, such as stock trades or fund transfers, take place on that account.




Full Definition of Annual Fee


Annual Fee – also known as the Annual Management Charge – is a fee paid on an ongoing annual basis by you to the manager of your investment or life insurance /pension policy. These charges vary from company to company and from product to product but usually are in the range of 0.35% to 2%.

Annual fees are generally smaller than upfront charges and it is easy to make the mistake of thinking they are less important. This is not necessarily the case.

The percentage of the annual fee may be small but remember your investment or policy may reasonably be expected to grow and, assuming it does (otherwise why are you investing in it!) then the amount of money you actually pay in annual management charges grows with it, even though the percentage levy remains unchanged.

Beware of special offer investments which waive the initial charge but have an annual fee at the top end of the scale – you won’t be saving yourself any money!


Synonyms For Annual Fee


Annual Management Charge


Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/annual-fee/
Modern Language Association (MLA):
Annual Fee. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
January 27, 2022 https://payrollheaven.com/define/annual-fee/.
Chicago Manual of Style (CMS):
Annual Fee. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/annual-fee/ (accessed: January 27, 2022).
American Psychological Association (APA):
Annual Fee. PayrollHeaven.com. Retrieved January 27, 2022
, from PayrollHeaven.com website: https://payrollheaven.com/define/annual-fee/

Definition Sources


Definitions for Annual Fee are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 21st November, 2021 | 7 Views.