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A small amount paid as a charge for a service is called a nominal fee. The amount can be taken as a flat rate for processing an application form or for a range of costs associated with a transaction.
It can be an amount associated with the insurance policy for faster processing or for taking certain special financial services.
For example- Banks take such amount for fund transfer or for offering higher security protection to your account-related activities, or you pay it as commodities brokerage charges, interbank exchange rate, etc.
Sometimes, the nominal fee indicates a small payment for a high responsibility job.
Such a fee can be taken by executives working for government institutions where they take a nominal salary for their work, or a CEO may take $1 a year along with bonuses and stock options – which is a kind of adjusted remuneration agreed upon by the involved parties.
Sometimes, court settlement is made from a small amount like $1 to reduce the penalty for one party.
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