Definition: A noninterest-bearing note is a note or bond with no stated interest rate on its face. Contrary to the name, noninterest-bearing notes do actually pay interest. The interest is implied in the face value of the note.
What Does Non-Interest Bearing Note Mean?
A noninterest-bearing note works the same way a discounted bond works. The note is issued for a lessor amount than the face value. After the note matures the entire face value is repaid. It might be easier to look at an example.
Example
Big Ben’s Machining is looking for financing to expand its machine plant. It decides to talk with a bank about long-term notes. Big Ben and his bank settle on a noninterest-bearing 5%, $10,000, 10-year note with $500 monthly payments. The bank writes Big Ben a check for $6,927.71. At the end of the 10 years Big Ben will have paid the bank back the full $10,000. Here is a table that shows the noninterest bearing note calculations.
Download this accounting example in excel to help calculate your own bond interest problems. As you can see, the note actually pays interest over the course of its life. The interest is just built into the amount borrowed. The cool thing about noninterest-bearing notes is that you can easily calculate the total interest expense. The total interest is the just the face value minus the amount received.
In Big Ben’s case, the total interest expense over the life of the note would be $3,072.29 or $10,000 – $6,927.71.
If Big Ben actually needed $10,000 in order to purchase his new piece of equipment, he would have to take out a $33,906.13 note with the same interest and payment amounts.  Excess Interest Sub-account means an administrative account deemed to be a sub-account of the Distribution Account. The Excess Interest Sub-account shall not be an asset of any REMIC Pool. Retained asset account means any mechanism whereby the settlement of proceeds payable under a policy or contract is accomplished by the insurer or an entity acting on behalf of the insurer depositing the proceeds into an account with check or draft writing privileges, where those proceeds are retained by the insurer or its agent, pursuant to a supplementary contract not involving annuity benefits other than death benefits. Interest Funding Account means the trust account designated as such and established pursuant to Section 5.01(a). Net Interest Bearing Debt means the aggregate interest bearing debt less cash and cash equivalents of the Group in accordance with the applicable accounting principles of the Group from time to time (for the avoidance of doubt, excluding guarantees, bank guarantees, Subordinated Loans, any claims subordinated pursuant to a subordination agreement in form and substance satisfactory to the Agent and interest bearing debt borrowed from any Group Company). Capitalized Interest Account The separate Eligible Account designated as such and created and maintained by the Trustee pursuant to Section 3.05(h) hereof. The Capitalized Interest Account shall be treated as an "outside reserve fund" under applicable Treasury regulations and shall not be part of any REMIC. Except as provided in Section 3.05(h) hereof, any investment earnings on the amounts on deposit in the Capitalized Interest Account shall be treated as owned by the Depositor and will be taxable to the Depositor. REMIC I Interest Loss Allocation Amount With respect to any Distribution Date, an amount equal to (a) the product of (i) the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) the REMIC I Remittance Rate for REMIC I Regular Interest I-LTAA minus the Marker Rate, divided by (b) 12. REMIC 2 Interest Loss Allocation Amount With respect to any Distribution Date, an amount equal to (a) the product of (i) the aggregate Stated Principal Balance of the Mortgage Loans and related REO Properties then outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LTAA minus the Marker Rate, divided by (b) 12. REMIC II Interest Loss Allocation Amount With respect to any Distribution Date, an amount equal to (a) the product of (i) the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) the REMIC II Remittance Rate for REMIC II Regular Interest II-LTAA minus the Marker Rate, divided by (b) 12. Assumed Interest Amount With respect to any Distribution Date and Class of Subordinated Certificates, one month's interest accrued during the related Interest Accrual Period at the Pass-Through Rate for such Class on the applicable Assumed Balance immediately prior to that Distribution Date. Class A-S Percentage Interest As of any date of determination, with respect to the Class A-S Certificates, a percentage interest equal to a fraction, the numerator of which is the Class Principal Balance of the Class A-S Certificates on such date, and the denominator of which is the Class Principal Balance of the Class A-S Regular Interest on such date. Interest Account means the Account within the Debt Service Fund so designated and established by Article V hereof. Realized Interest Loss means, with respect to each Mortgage Loan (including an REO Mortgage Loan), (i) in the case of a Liquidation Realized Loss, the portion of any Liquidation Realized Loss that exceeds the Realized Principal Loss on the related Mortgage Loan, (ii) in the case of a Bankruptcy Loss, the portion of such Realized Loss attributable to accrued interest on the related Mortgage Loan, (iii) in the case of an Expense Loss, an Expense Loss resulting in any period from the payment of the Special Servicing Fee and any Expense Losses treated as Realized Interest Losses pursuant to clause (iv) of the definition of “Realized Principal Loss” or (iv) in the case of a Modification Loss, a Modification Loss set forth in clause (iii) of the definition thereof. Interest Funds With respect to each Loan Group and any Distribution Date (i) the sum, without duplication, of (a) all scheduled interest during the related Due Period with respect to the related Mortgage Loans less the Servicing Fee, the Trustee Fee and the LPMI Fee, if any, (b) all Advances relating to interest with respect to the related Mortgage Loans made on or prior to the related Distribution Account Deposit Date, (c) all Compensating Interest with respect to the related Mortgage Loans and required to be remitted by the Master Servicer pursuant to this Agreement with respect to such Distribution Date, (d) Liquidation Proceeds and Subsequent Recoveries with respect to the related Mortgage Loans collected during the related Prepayment Period (to the extent such Liquidation Proceeds and Subsequent Recoveries relate to interest), and (e) all amounts relating to interest with respect to each Mortgage Loan in such Loan Group repurchased by the Seller pursuant to Sections 2.02 and 2.03 and by EMC pursuant to Section 3.18, in each case to the extent remitted by the Master Servicer to the Distribution Account pursuant to this Agreement minus (ii) all amounts relating to interest required to be reimbursed pursuant to Sections 4.02 and 4.05 or as otherwise set forth in this Agreement. Note A Percentage Interest means a fraction, expressed as a percentage, the numerator of which is the sum of the Note A-1 Principal Balance, the Note A-2 Principal Balance, the Note A-3 Principal Balance, the Note A-4 Principal Balance and the Note A-5 Principal Balance, and the denominator of which is the sum of the Note A-1 Principal Balance, the Note A-2 Principal Balance, the Note A-3 Principal Balance, the Note A-4 Principal Balance, the Note A-5 Principal Balance and the Note B Principal Balance. REMIC II Sub WAC Allocation Percentage 50% of any amount payable or loss attributable from the Mortgage Loans, which shall be allocated to REMIC II Regular Interest I-SUB, REMIC II Regular Interest I-GRP, REMIC II Regular Interest II-SUB, REMIC II Regular Interest II-GRP and REMIC II Regular Interest XX. Class A Percentage Interest As of any date of determination, with respect to the Class A Regular Interest and the Class A Certificates, a percentage interest equal to a fraction, the numerator of which is the Certificate Balance of the Class A Certificates, and the denominator of which is the Certificate Balance of the Class A Regular Interest. Subordination Depletion Date Interest Shortfall With respect to any Distribution Date that occurs on or after the Subordination Depletion Date with respect to any Unscheduled Principal Receipt (other than a Prepayment in Full or Curtailment): Note Distribution Account means the account designated as such, established and maintained pursuant to Section 5.1. Class Percentage Interest With respect to (i) each Class of Class A-3 Exchangeable Certificates and each Corresponding Exchangeable Upper-Tier Regular Interest, equal to (x) the Certificate Balance (or, if such class has an “X” suffix, Notional Amount) of such Class of Certificates, divided by (y) the Certificate Balance of the Class A-3 Upper-Tier Regular Interest, (ii) each Class of Class A-4 Exchangeable Certificates and each Corresponding Exchangeable Upper-Tier Regular Interest, equal to (x) the Certificate Balance (or, if such class has an “X” suffix, Notional Amount) of such Class of Certificates, divided by (y) the Certificate Balance of the Class A-4 Upper-Tier Regular Interest, and (iii) each Class of Class A-S Exchangeable Certificates and each Corresponding Exchangeable Upper-Tier Regular Interest, equal to (x) the Certificate Balance (or, if such class has an “X” suffix, Notional Amount) of such Class of Certificates, divided by (y) the Certificate Balance of the Class A-S Upper-Tier Regular Interest. The initial Class Percentage Interest of each Class of Exchangeable Certificates in each of the Corresponding Exchangeable Upper-Tier Regular Interests is set forth below: Class of Exchangeable Certificates Class Percentage Interest in the Class A-3 Upper-Tier Regular Interest Class Percentage Interest in the Class A-3-X1 Upper-Tier Regular Interest Class Percentage Interest in the Class A-3-X2 Upper-Tier Regular Interest Class A-3 Certificates 100% 100% 100% Class A-3-1 Certificates 0% N/A 0% Class A-3-2 Certificates 0% N/A N/A Class A-3-X1 Certificates N/A 0% N/A Class A-3-X2 Certificates N/A 0% 0% Class of Exchangeable Certificates Class Percentage Interest in the Class A-4 Upper-Tier Regular Interest Class Percentage Interest in the Class A-4-X1 Upper-Tier Regular Interest Class Percentage Interest in the Class A-4-X2 Upper-Tier Regular Interest Class A-4 Certificates 100% 100% 100% Class A-4-1 Certificates 0% N/A 0% Class A-4-2 Certificates 0% N/A N/A Class A-4-X1 Certificates N/A 0% N/A Class A-4-X2 Certificates N/A 0% 0% Class of Exchangeable Certificates Class Percentage Interest in the Class A-S Upper-Tier Regular Interest Class Percentage Interest in the Class A-S-X1 Upper-Tier Regular Interest Class Percentage Interest in the Class A-S-X2 Upper-Tier Regular Interest Class A-S Certificates 100% 100% 100% Class A-S-1 Certificates 0% N/A 0% Class A-S-2 Certificates 0% N/A N/A Class A-S-X1 Certificates N/A 0% N/A Class A-S-X2 Certificates N/A 0% 0% Excess Interest Distribution Account The segregated non-interest bearing trust account or sub-account created and maintained by the Certificate Administrator pursuant to Section 3.05(k), which shall be entitled “Wells Fargo Bank, National Association, as Certificate Administrator, for the benefit of the holders of DBJPM 2017-C6 Mortgage Trust Commercial Mortgage Pass-Through Certificates, Series 2017-C6 – Excess Interest Distribution Account,” and which must be an Eligible Account or a sub-account of an Eligible Account. The Excess Interest Distribution Account shall not be an asset of any Trust REMIC, but rather shall be an asset of the Grantor Trust. Companion Loan Distribution Account As defined in Section 3.4(a). Noteholders’ Interest Distributable Amount means, with respect to any Distribution Date and Class of Notes, the sum of (i) the Noteholders’ Monthly Interest Distributable Amount for such Distribution Date plus (ii) each Class of Notes and the Noteholders’ Interest Carryover Amount, if any for such Distribution Date and each such Class. Interest on the Class A-1 Notes and the Class A-2-B Notes shall be computed on the basis of a 360-day year and the actual number of days elapsed in the applicable Interest Period; interest on all other Classes of Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months. L/C Interest shall have the meaning ascribed to such term in Section 3.6 hereof. Collateral Monthly Interest means the monthly interest distributable in respect of the Collateral Interest as calculated in accordance with subsection 4.06(c). Month End Interest As defined in each Servicing Agreement. Overfunded Interest Amount With respect to any Subsequent Transfer Date, the excess of (A) the amount on deposit in the Capitalized Interest Account on such date over (B) the excess of (i) the amount of interest accruing at the assumed weighted average Pass-Through Rate of the Offered Certificates for the total number of days remaining through the end of the Accrual Periods ending February 24, 2005, March 24, 2005 and April 22, 2005 over (ii) one month of investment earnings on the amount on deposit in the Capitalized Interest Account on such date at an annual rate of 0.75%. The assumed weighted average Pass-Through Rate will be calculated assuming the Certificate Index is 2.59% for any Subsequent Transfer Date prior to the February 2005 Distribution Date, 2.83% for any Subsequent Transfer Date prior to the March 2005 Distribution Date and 3.08% for any Subsequent Transfer Date prior to the April 2005 Distribution Date.
Non-Interest Bearing Liabilities.","Borrowing Costs Refer to the accounting policy notes under Interest Bearing Liabilities and Non-Interest Bearing Liabilities.","Schulman’s Historical ROIC* 18 * ROIC Defined As Adjusted NOPAT Divided By Total Assets Less Cash, Goodwill And Non-Interest Bearing Liabilities.","Comparing the Regular Balance Sheet and EVA Balance Sheet below in Figure 2-1, we can find that the main difference between these two is that in EVA’s Invested capital, NIBL (Non-Interest Bearing Liabilities) is not included.","In this way, we will be able to appreciate the context properly and compare it with the powers that the pater holds over other persons alieni iuri.","Non-Interest Bearing Liabilities – Non Current Liabilities Release from single purpose6,8506,850 6,8506,850 15.","While NOx/NOy partitioning is largely determined by ozone and aerosol concentrations [14], there are several mechanisms that can change the concentration of NOy. Decreases in the total ozone column can modify the NOy source, N2O.","The Sub-Committee concluded that with the addition of the agreed conditions the grant of a licence would not add to the cumulative impact and would promote the licensing objectives."],"id":"non-interest-bearing-liabilities","title":"Non-Interest Bearing Liabilities"},"groups":[{"snippetLinks":[{"key":"money","type":"clause","offset":[20,25]},{"key":"company","type":"clause","offset":[33,40]},{"key":"owes","type":"definition","offset":[41,45]},{"key":"liability","type":"clause","offset":[49,58]},{"key":"balance-sheet","type":"clause","offset":[66,79]},{"key":"current","type":"clause","offset":[81,88]},{"key":"non","type":"clause","offset":[92,95]},{"key":"interest-or-penalties","type":"clause","offset":[118,139]},{"key":"accruing","type":"definition","offset":[140,148]},{"key":"amount-owed","type":"clause","offset":[156,167]},{"key":"avoidance-of","type":"definition","offset":[177,189]},{"key":"interest-bearing","type":"clause","offset":[205,221]},{"key":"liabilities","type":"clause","offset":[222,233]},{"key":"exclude","type":"clause","offset":[234,241]},{"key":"related-to","type":"clause","offset":[254,264]},{"key":"deferred-taxes","type":"clause","offset":[265,279]},{"key":"pension","type":"clause","offset":[281,288]},{"key":"retirement","type":"clause","offset":[290,300]},{"key":"leases","type":"clause","offset":[305,311]}],"samples":[{"uri":"https://www.sec.gov/Archives/edgar/data/1744489/000174448922000059/fy2022_q1x10qxex1011.htm","label":"Restricted Stock Unit Award (Walt Disney Co)","score":12},{"uri":"https://www.sec.gov/Archives/edgar/data/1744489/000174448921000047/fy2021_q1x10qxex105.htm","label":"Restricted Stock Unit Award (Walt Disney Co)","score":12},{"uri":"https://www.sec.gov/Archives/edgar/data/1744489/000174448921000047/fy2021_q1x10qxex106.htm","label":"Restricted Stock Unit Award (Walt Disney Co)","score":12}],"snippet":"means the amount of money that a company owes (a liability on the balance sheet, current or non-current), without any interest or penalties accruing to the amount owed. For the avoidance of any doubt, Non-Interest Bearing Liabilities exclude liabilities related to deferred taxes, pension, retirement and leases.","size":5,"hash":"836b1bcf7858558b7835225c1386a85d","id":1}],"nextCurs":""}} id=pagination-first-page>
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