What is Net Interest Income (NII)?

Net interest income (NII) is a financial metric used to measure the difference between revenue generated and interest paid on different types of assets such as securities, loans, mortgages, and other financial instruments. NII is dependent on several factors including the interest rate and whether the interest rate is fixed or variable. Banks and other financial institutions typically utilize the net interest rate to determine the difference between liabilities and interest-bearing assets so they know the income they have generated on a particular investment or loan.