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What else can I help you with?
Is fixed interest rate better than variable interest rate for banks?
Yes, because a variable interest rate can go up as high as 9% APR when you can get a fixed APR of 3.5%. Also with variable interest your payments will always jump around and with fixed your payments are what you sign.
Does my bank offer any insurance on my annuities?
Most banks offer some sort of insurance on annuities, often at a yearly fee.
How do I find fixed annuities?
You can find them at any banks or financial advisors
What is the interest on savings accounts?
Savings accounts with traditional banks typically do not have high interest rates. Banks such as Ally or ING Direct offer slightly higher interest rates that are approximately .75 to 1 percent.
How do banks make money when it pays interest on deposits?
They charge a much higher interest on loans than they pay on deposits.
Are indexed annuities insured?
They are not insured like with money in the bank and the FDIC. But it is safe as to the extent that the insurance company is safe and at this point probably safer than the banks and the FDIC! I strongly advise against indexed annuities at this point where you can receive 0% interest. Why not a fixed annuity that would guarantee the interest rate for a fixed period of time? Currently 6% guaranteed for 10 years.
Why do finance companies charge higher interest rates than commercial banks?
Because they offer a higher rate of interest to their deposit customers. Loan Interest is the chief source of income for all banks & financial institutions. The difference in the rate of interest offered to deposit customers and loan customers is usually the profit a bank makes. Usually people prefer banks when compared to financial institutions to deposit their money. So to attract customers these institutions offer a higher rate of interest on deposits with them. In order to maintain their profit margin, they charge a higher rate of interest on their loan customers. So, higher the rate on deposits, higher is the rate on loans.
Why do short term CDs have higher interest rates?
Short term CDs have higher interest rates because banks want to incentivize customers to deposit their money for a shorter period of time. This allows banks to have more flexibility with the funds and potentially invest them in higher yielding opportunities.
Why is interest on saving account why do banks pay interest?
Banks pay interest on savings accounts to incentivize customers to deposit their money, which they can then use for lending and investment purposes. This process helps banks maintain liquidity and profitability, as they earn a higher return on loans than they pay in interest to savers. Additionally, paying interest attracts customers and fosters competition among banks for deposits. Ultimately, interest on savings serves as a reward for customers who choose to save their money with the bank.
How banks afford to pay interest on their customers' savings account deposits?
They loan out the money in their customers' accounts and charge a higher interest rate on the loans.
Why don't banks pay higher rates on saving accounts?
Banks typically don't pay higher rates on savings accounts because they use deposited funds to finance loans and other investments, which often yield higher returns. Additionally, competition among banks and the overall economic environment, including interest rates set by central banks, influence how much interest is offered. Banks also balance the need to attract deposits with their operating costs and profit margins. Consequently, higher rates might not be sustainable for their business model.
Are small business loans from the bank typically offered as fixed or variable interest rates?
Small business loans from banks are typically offered with fixed interest rates, meaning the interest rate remains the same throughout the life of the loan.
