Guarantee Handling Fee

Guarantee Handling Fee refers to the service fee charged by a bank or financial institution to the applicant or beneficiary when issuing, advising, amending, or confirming a guarantee (such as a performance guarantee, advance payment guarantee, bid bond, etc.). This fee typically includes issuance fees, advising fees, amendment fees, confirmation fees, etc., and is charged at a certain percentage of the guarantee amount (e.g., 0.1%-1% per annum) or a fixed amount, depending on bank policies, guarantee tenor, risk level, and customer credit. Usage scenario: In import and export trade, when the buyer or seller requires a bank credit guarantee, they apply to the bank for a guarantee, which generates a guarantee handling fee. Notes: The party bearing the fee should be clearly specified in the contract (usually the applicant); rates vary significantly among banks, so comparison in advance is necessary; extension or amendment of the guarantee may incur additional handling fees; if the guarantee is claimed, the handling fee is non-refundable. Difference from 'Letter of Credit Fee': The guarantee handling fee applies to guarantee business, while the letter of credit fee applies to letter of credit business; the two are independent. Difference from 'Margin/Deposit': A margin is cash collateral deposited by the applicant with the bank, whereas the guarantee handling fee is a service fee charged by the bank and is non-refundable.