Which aspect is NOT included when defining interest under TISA?

The Truth in Savings Act (TISA) aims to ensure that consumers receive clear and concise information regarding the interest earned on their accounts. When defining interest, it encompasses various elements related to the benefits provided to account holders for the use of their funds.

Payment of a bonus, while it may seem beneficial, does not fall under the core definition of interest as per TISA. Interest is primarily concerned with the compensation paid to depositors for allowing the use of their funds, which is where payment for the use of funds is relevant. Reductions in fees can indirectly relate to the overall benefit an account holder might receive, but it is not classified as interest income. Absorption of expenses pertains to the financial institution's internal cost management rather than a benefit to the account holder in the context of interest.

By understanding that interest specifically relates to the remuneration for the use of funds, it is clear that a payment of a bonus does not directly relate to the fundamental concept of interest under TISA. This distinction is essential in grasping how financial institutions communicate interest rates and other account incentives to consumers.